COMMENTARY:
SOY
BEANS – The beans have bounced in a modest fashion. The rally in my opinion has more to do with feedgrain strength, than any bean fundamentals. The flat price could be influenced by the Chinese demand going forward. It is clear the beans will lose market share to south america. The weather at present in Brazil is excellent. The Argentinian weather is ok, the progress there though is modest. The US could add to the domestic carry in reports. It is my belief we will see a 400 mil bu carry, or close in the next year. The beans could have a limited upside.
MEAL– The meal has been a bit stronger this week. The demand side of the market has picked up a bit as well as some short covering. This could last a bit longer pushing flat price futures towards 340 ton. As I have said, I am not overly bullish meal, however the market has been due a rally.
BEAN OIL – The bean oil flat price has lost this week. A bit of a rebound today. The vegoil story is slowly changing. Although the canola is supportive for the time being. It is my thought that rallies are now opportunities to sell. The Palm oil will will continue to be a supportive factor until it isn’t. The fundamentals there are changing as well. As we move into the new year, the supply side should be improve, which could assist to ease prices.
CORN
The corn continues to rise. The weather is a contributing factor. The largest friendly aspect to the market today is the near record Ethanol grind. The positive in the Ethanol market is the margins are very positive. This should continue to keep demand moving in a very positive way. The bear side of the market is the price. I do believe that the market can rally a bit more. To see a market above $6.00 would take a further problem globally in my opinion.
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John J. Walsh
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