Commentary:
SOY
The markets pulled back a bit today. The thought is that the ARG strike will come to an end. The offers to end the strike are fairly reasonable given the current rate structures. This is just a guess on my part. I believe the strike will come to an end. The ramifications are unclear. However, my thought is that the meal market may come under some selling pressure if settled. The beans should remain well bid globally given the current crush margins. In addition, the Chinese demand has been stout. Will the need to live up to the trade agreements remain in place if trump is out? Remains to be seen. I have my fears. The vegoil market is the one that I believe still has legs both flat price, and on a relative basis. The end of year position squaring could cause some reasonable corrections. Exercise caution. The funds are now fairly committed. Look for an opportunity in bean oil on breaks. Be sure to quantify all risk. The weather in South America needs to be monitored closely. The Brazilian weather overall is better than Argentina. The next two weeks could have a significant impact on yields.
CORN
The corn continues to perform. In my opinion the main reason for the strength is the continued buying from China. The Chinese have purchased roughly 9 mmt of corn through the first 11 months of the calendar year. This is the largest total on record. The November imports are impressive. This is all significant as the talk is the Chinese are replenishing stocks. It is my opinion the purchase of these particular quantities are reflective of the poor crop last year. It may be realistic to assume larger purchases in the near future. It is essential to quantify your risk. However, it is my belief that the Chinese will be under the corn market. In addition the US balance sheet could decline further. At the very least, acreage will be important into the new year.
Be Well.
Trade Suggestion(s)
NA today
Risk/Reward
Futures-
Options –
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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