COMMENTARY: The soy had a large bounce back today. The USDA will release acreage this week. This, in my opinion, will be an important report for the market. The bounce today was related to the weather in general. Also, I think the recent break had some short, and the market was evening up. There are concerns over weather reports for July / August and continued heat and dryness. Putting the weather concerns aside, my thoughts on the market are as follows. It is my thought (based on my own theory) that the acreage will be larger than anticipated. This will be true for regularly planted acres, as well as a large jump in double crop. The reasoning behind this is simple. Pure economics. Why would anyone disregard the current opportunity to plant as many profitable acres as possible. The recent demand for beans has slowed. It is also my thought this will continue. The Chinese have a plentiful stock of beans at present. In addition, there are concerns again over ASF. Although the reports from China are minimizing this. The nearby meal is due a potential bounce in my opinion. Today, and perhaps tomorrow. We are not the cheapest offer at present, all of a sudden. This in my opinion will not delete the oil share strength. The current oil share is at approx 46%. The vegoil market should continue to be supported. The global stocks situation won’t be solved for approx 2 months given production, etc. This, in my opinion, will allow oil share to gain. The question lingers regarding the acreage. Will it be bullish or bearish. If my theory is correct (IF), then we may start a slow grind lower. If that transpires then the oil share could in my opinion still trade to 50%. I continue to watch both the oil and meal spreads. Let’s see what the acreage brings.
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John J. Walsh
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