COMMENTARY: In my humble opinion today was a day of change. The corn moved into the leadership position in the AG space. The beans have been dominant. It is my thought now they are a follower. First, the corn carry was reduced. This is in line with my thoughts. The 21 carry is est 1.117 bil, the 22 carry 1.242 bil. Both are friendly and supportive numbers. Especially given the global numbers that are still in a decline. It is not my contention that corn needs to have a huge rally flat price. Rather on a relative basis hold its own and remain a bit supported. The demand and harvest weather will now remain watched and important.
The beans on the other hand are a different animal in my opinion. The carry was raised a nominal amount. This was not significant. The USDA chose to reduce yield. This is too early in my opinion. The global numbers on the other side were increased. The global carry now sits at 96 mmt. It is on its way to 100 mil mt in my opinion. A huge global number. In addition, meal use is in decline. The US bean oil is more expensive than competition. The main point here is that I believe it will be difficult for beans to rally from here unless the weather turns hot and dry in the next three weeks. If that happens, higher prices. Without that and more timely rains a larger carry, and prices decline. It is clear the weather now will be key, as well as demand.
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John J. Walsh
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