COMMENTARY: The market had a correction Friday. The beans and oil lost while meal gained. There was an unwinding of the spreads as the supreme court sided with small refiners regarding blending. This, while noteworthy, has little impact today on blending rates. It seems little will change in the near term. What does that mean if true? At present the vegoil market globally remains supported after the last break. In my opinion this should continue for the next two to three months. The crush at present is being supported by the demand for vegoil. This is creating an extra supply of meal. There are global concerns, the Chinese bean demand is slowing a bit. They are still buying large quantities of vegoils. This also should continue in my opinion. The water levels in the Parana river are low, and can become non navigable. This would have a large impact especially as it relates to vegoils. The main point, the oil share has fallen today to approx 45.5%. It is my belief that oil share will still trade to 50-52%. This would of course be led by soy oil if it comes to pass. As always quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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