COMMENTARY: The markets are under heavy liquidation. Was today enough. Remains to be seen. The risk is so high at present. This is important to keep in mind when looking at strategies. There are many reasons at play today. The weather has changed, and moderated. It appears more showers will be received in the next week or two. It is always important to note beans are not made in June. Expect more volatility and two sided trade. It is important, in my opinion, to not make light at what has transpired here. The products, both meal and oil played a big part of this large break. As mentioned, the meal market was over priced relative to global prices. In addition, the Argentinian crush increased, making more meal available. In the long run there are many competitive meals that are in an expansion mode. The vegoil market was the leader. The oil share has dropped a great deal. The US prices were over done relative to competitive offers. The palm oil was starting to build production. In addition, talk the US would change bio mandates to help smooth the prices out. This break may have leveled the playing field with Palm for the time being. In addition, perhaps the mandate changes will be off the table. Tomorrow will be interesting and the oil share may climb back after this intense break. Look for opportunities as a producer. There remains a lot of summer. Risk is very high. As always, have a quantifiable strategy.
John J. Walsh
President, Walsh Trading, Inc.
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