SOY: The USDA released the WASDE report. The bean yield was raised which puts the carry at 610. My early thoughts were a 650 carry. This may still come to fruition. The global numbers are large at 95.36 mil mt. The futures shrugged this off today as the recent weather gives pause for concern. In addition the Chinese have been buying beans. A thought regarding this. The recent purchases seem to be repurchase of Brazilian cancellations. This makes sense as the Brazilian price is considerably higher than the US price. The point of this is the global balance won’t shift much, if any, due to these purchases. It is my opinion that the bean market may rally, however, this rally represents an opportunity to make sales. The long term supply side is bearish in my opinion.
CORN: The USDA released the WASDE today. The corn numbers were changed less than anticipated. The carry is at 2,756 bil. A healthy number. This number may be the largest seen for the year however. Please consider the following thoughts. The recent weather could impact 400 million bu of corn. This is not factored. The Chinese continue to buy record amounts of US corn. This is not factored. There are estimates that 10-12 mmt of corn will be needed by China. If realized this could be very important to the US balance sheet. I say if. However, the weather plus the Chinese purchases if full factored could potentially move the carry below 2 bil bu. This would be important. Please consider these as my personal opinions. Always have a quantified risk relative to any strategy.
John J. Walsh
President, Walsh Trading, Inc.
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