Commentary:
SOY: The beans and meal continued the rally today. There are a couple of reasons for this. The most important driving factor, in my opinion, is that the Chinese have been buyers almost every day. This is a very good thing. It must be considered, with the new export year starting Sept 1, the Chinese in some instances may be replacing Brazilian beans with the US origin. As I have said, the global balance sheet is what needs to be considered. The market has had a very significant rally over the last month. It is more than I thought was possible. Having said that, I am glad it has transpired and before Fridays USDA numbers, this rally may present a significant hedging opportunity. For producers, consider locking in both old and new crop sales in this level. It is difficult for me to see the market trade above 10.00 per bushel.
CORN: The corn was quiet. The market has dialed in some of the crop losses at present. It is my thought however, that the losses could be a bit more than the trade has dialed in. It is true that the ratings are below the recent 5 year average. The Chinese continue to buy corn, and talk now that DDG will be added to the mix. The weather in China, according to the dialogue, is not very positive It appears there could be corn issues in the making. If true the US and the global balance sheet will be in an interesting situation. It is my thought that breaks in corn should be bought with a stop loss in the mix. The USDA report Friday may prove significant depending on the numbers.
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BE WELL,
John J. Walsh
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