The markets are liquidating. The price action today was led by soyoil. The USDA report tomorrow will be interesting. The stocks number is important. The expectation is for a draw down. However, if the govt finds stocks that would be a surprise and would shock the system. An increase in stocks could lead to further liquidation. This is of course an if scenario. A further drawdown may put a floor under the market. The vegoil market has been a leader of late. It is possible the market is finding a high. The global prices for palm and soy appear to be topping at present. The Chinese prices are in retreat at present as demand stagnates. The meal has been the weakest link due to the asf in China. The meal may be due a correction to the upside. It is my thought this could present a selling opportunity. A couple final thoughts The bean oil bull spreads may have run the course. Take some profit if long. The meal spreads continue to liquidate. This may well continue. Exercise caution. The bean spreads remain at large inverse. Tomorrow may change this.
The corn has been strong based on the demand scenario. The Chinese continue to be buyers and have the sales in a nice position. The USDA report tomorrow will be important. It is my thought that the stocks in corn will continue to decline. The acreage intentions will become important. This is especially true as the Safrihna crop is well behind schedule as the planting dates were slow. Continue to watch the july dec corn spread. The question now is if this can challenge the recent highs. The market is at approx 70 over. The highs are approx 90 over. Tomorrows numbers could be a very important part of the puzzle.
John J. Walsh
President, Walsh Trading, Inc.
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