COMMENTARY:
SOY
BEANS – The beans started higher this morning. The sales yesterday were a plus, and the corn strength spilled over. The market eased as the day went on. The beans as I have mentioned do not have reason to be this elevated in my opinion. The harvest has slowed due to rain. However, the progress is good. The south american planting is in a good place. The private estimates are for record crops. This remains to be seen. But so does the La Nina. It is my belief the domestic carry will approach 400 million. The global 105 mmt plus. That does not equal 1250 – 1300 beans.
MEAL – The meal gained today. The suggestion I made yesterday was to look for a near term bottom. At the least don’t press the down side. I am not bullish meal. However, on a relative basis meal may be the strongest in the short run. The domestic cash market seems to be picking up. In addition perhaps a slower crush will prove a bit friendly.
OIL – The bean oil came under pressure. The global vegoil market was down yesterday. There are a few friendly aspects as discussed. However, the market in my opinion is saying this will happen where the stocks will be replenished. The Chinese vegoil stocks are more than ample. This could lead to a slow down in purchases there. It is my belief the highs are in in the bean oil market. The question remains at what pace we ease.
CORN – The corn was the leader today. The recent purchases were important as well as the recent rains slowing things down. The corn in my opinion could bounce perhaps a bit more. However, it is on a flat price basis that I look for gains. The long term costs associated with planting corn could have a significant impact on acres long term unless we see a reasonable gain on a relative basis.
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BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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