BEANS – The beans traded two sided today. The market paused a bit after yesterday’s decline. In my opinion the market has further work to do to the down side. The carry could continue to increase. The demand from the US has slowed. This could last through the first quarter. The Brazilian market should dominate in the export arena. In addition, the South American weather situation is much improved. This increases the probability of larger crops especially from Brazil. The area there is expanding. We are now the price taker, not the price maker.
MEAL – The meal remains under constant slight pressure. I remain overall flat price neutral to bearish. However, on a relative basis the meal could start to gain on the complex. This theory is dependent on the veg oil market of course. The global crush will continue to be well supplied, this is a bearish point for meal.
BEAN OIL – The bean oil rebounded today after sharp declines yesterday. The highs are in in the bean oil in my opinion. The question now will be when the global market starts to ease due to supply concerns dwindling. It appears at present we are close to the switch. In addition, the new crop crush will improve, at the very least be strong. This could also prove a bearish input for bean oil on a flat price basis.
CORN – The USDA increase has put the corn back on the defensive. In the near term it is my thought the corn may face a bit more pressure. This could take us down below the $5.00 level. The market however will start to consider the new crop acreage which, in my opinion, may be more favorable to beans. This is due in no small part to the cost of planting. The energy costs this year will have more of an impact than in years past.
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John J. Walsh
President, Walsh Trading, Inc.
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