COMMENTARY: The soy is dialing in the current weather forecasts. The crop conditions dropped yesterday 2%. The market is now 10% points behind last year. However, as I have mentioned, it is early to kill beans. The Chinese made the first purchases recently for beans of late. The Chinese may, in my opinion, reduce US purchases going forward. This could have an impact. The next question to answer is acreage. The acreage numbers will have a long term impact most likely. Looking at the products. The meal again is under pressure. The global numbers are weak. The domestic off take remains sluggish. This is reflected in the prices. It is my belief this could continue both on a relative basis and flat price. The veg oil on the other hand is showing some strength. The palm perhaps is bottoming. The bean oil market is a bit over done to the down side. The oil share, in my opinion, is and will gain in the near term. The question is the flat price. This will be dependent on South American availability. If there are any disruptions, then the flat price can be very dynamic still. As always quantify the risk. Watching the deferred crush margins. No action yet, just watching. New crop meal spreads are inverted. Could those go to a carry? Watch acreage.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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