COMMENTARY:
SOY: The soy complex was higher. The meal and beans led the strength today. Consequently the oil share dropped a bit to approx 47%. The July contract went off the board today, without any major fire works in general. The market is led by the weather concerns that indicate weather issues remain a potential problem. The domestic carry remains tight. It seems worthwhile to note that exports for the three largest producers are declining. This is fueled by Chinese demand waning a bit. It is still my thought that vegoils will be the leader in the near term. This is fueled by declines in the Canadian canola production as well as stocks. The inability for Palm stocks to increase in a meaningful way. The US bean oil at present remains friendly in its own right. Without the global oils gaining a surplus, the market should remain supported. The beans will follow bean oil higher if the market continues to work higher. As always quantify your risk.
CORN: The corn market continues to exhibit strength. The recent rains have been beneficial. The concerns however remain for the end of the month through August for another spell of dry and potentially hot temperatures. This could cause more damage. The US corn is also supported by the Brazilian crop failure in the second crop. This has opened a window for more US corn this year. The new crop year may present a different picture. It is essential to take advantage of next year increases and profitability, however that is deemed. The July left the board today. There were fireworks yesterday pushing the July above seven dollars. The question I have is the Sept inverse to the rest of the board. Will we or could we see a counter seasonal move? The inverse is small. Typical to see a carrying charge market. If there are further problems perhaps the market inverts more. Remains to be seen of course. As always quantify the risk. The ride could get bumpy.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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