COMMENTARY:
SOY
BEANS – The beans were higher yet again. Interestingly, the tech picture has not shifted to bullish they way I look at it. The market in my opinion is following a general theme of inflation. This with a general fear of the potential for La Nina. The market tends to focus on what it wants to. The current fundamentals show the carry growing. The Chinese imports down substantially year on year. In fairness the purchases this week are better. At present there is a thought the harvest lows are in. This remains to be seen. For the time being, be patient and cautious.
MEAL – The meal continues its recovery. There are thoughts that a slowing crush should give the meal a bid. This is a driver. It seems important to understand the crush is slowing partly due to the meals weakness in the demand market. The Chinese are openly attempting to change the ration in feed as it relates to meal and corn both. The tech picture is temporarily friendly. Be patient and let the market do what it needs to.
BEAN OIL – The bean oil both flat price and on a relative basis is making gains. The global veg oil picture remains tight. The palm continues to make new highs due to a lack of stocks. The supply side remains friendly. It is uncertain when this will change. The outside markets, most importantly crude is making further gains. Given the supply side, the domestic changes. Who can say what stops the energy move. Be patient with bean oil. The tech picture on the daily gave a buy. This could be bigger that expected. As always quantify the risk. The risk is going up.
CORN – The corn is working higher. The corn may have the long tail here. The current carry is ample. The thoughts of acreage shifts are not accurate if corn rallies. The market will need corn acres. In addition the thoughts of dryness in South America. Although premature may keep a bid under corn. The demand has been ample. The market will shift its attention to the southern hemisphere. The weather will be a driver.
Quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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