SOY
The beans came under heavy pressure today. The weather has shown improvement. In addition, it appears the Pro Farmer tour has confirmed a record or near record crop. The concerns are also present related to the Chinese demand going forward. The US does have a window at present for exports. However, the South American crops in general are looking at a larger planted area. The production estimates are significantly higher at present. If realized the carry could swell to the second highest on record. It seems that the market may have a limited upside if the weather remains moderate in the near term. Especially if the rains continue and harvest domestically eases any pressure from the tighter carry experienced last year. The products have seen the oil share decline significantly. The global veg oil fundamentals have changed. The Palm market went to a large surplus. This is still weighing as Palm is a discount to soy. The global rapeseed is replenished, as well as sun oil from the black sea. The point is the vegoil is ample at present. It has been my contention that the markets are entering a declining phase in the soy. Exercise caution.
CORN
The corn had a strong performance today. The fundamentals are tightening. The corn is probably done with a chance for improvement. Perhaps some test weight with moisture. The Pro Farmer tour indicates the USDA crop is well overstated. That is not to guarantee that the USDA will reduce the yield. However, it does appear early weather has had some affect and the crop could decline. This on top of the EU crop shrinking by a fairly reasonable amount. The global picture may be changing quite a bit. The corn can be supported to a bit higher. I suggested looking at July 23 vs Dec 23. This in my opinion still has upside. As always quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
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