SOY: The soy is being led by the bean oil. It has been my belief that the bean oil will continue to exhibit strength. Therefore, if correct, oil share will gain. The carry continues to be supportive beans. The USDA outlook forum predicts 7 million more bean acres with 1 million more corn. It is my this thought will prove accurate. The demand remains robust into next year according to the predictions. This is where I may differ. While demand in my opinion will remain strong, I question further expansions in the Chinese demand numbers. It is my thought as well that the South American crops are improving. The harvest is under way. The US will not gain more market share going forward. The meal market as well is a price point that may limit demand, which could be a price driver. It is the bean oil that could still present opportunities. As always quantify your risk.
CORN: The corn had a set back Friday. Perhaps a bit of profit taking. The corn outlook remains supportive in my opinion at present. It is important to realize the market is at 540 and has made a significant move. The USDA outlook has estimated acreage increase by approx 1 miilion acres. This slight increase really does little to ease the declining carry. This will put an emphasis on growing a large crop. The South American safrina is behind schedule. This will put an emphasis on a large crop there as well. Weather will be key. The main point of this small thought is that although the market has rallied, the fundamentals remain friendly. The Chinese demand will be important of course. This looks to remain in place over the next year. If the market shows further liquidation, which is possible, it may be a buying opportunity. Quantify your risk
John J. Walsh
President, Walsh Trading, Inc.
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