COMMENTARY:
SOY: The soy was fairly quiet before the long fourth of July weekend. There is little room for error with production given the lack of acreage growth. The weather will be watched ever so closely. The current stocks remain tight. This will not change for the better domestically for a bit. The larger global numbers and the tight domestic will need to be balanced. The June stocks were down 44% percent from the previous year. The current crush pace from May is 3% below the year ago level. Perhaps partly due to tight supplies. The point here through the weekend is that a dry July and Aug can send prices higher. The oil share has been the leader over the last month or so. There are some rulings that do not effect the market today, but may give pause to the blending rates in the near future. The oil share has corrected. The overall global oil market is supported for various reasons. This should remain, in my opinion. However, volatility will remain and the share may not continue to be the price leader. I will remain patient until we get through the weekend.
CORN: The corn was under pressure today. The weather reports indicate more rain through the weekend. There remains concern however from some weather reports that the dryness will continue especially through the month. The corn use remains strong. The year on year increase is over 21% higher for the same comparable period. The market will also watch closely the continual decline in the South American production. Especially the Safrinha crop. In addition to the weather issues early, now a later freeze has clipped more. The jury remains out, but 3-5 mmt is considered. The point, if so, the US will be in a near term beneficial opportunity. The weather will leave little room for error. Watch the corn spreads in the near term if the weather remains hot and dry. As always quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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