COMMENTARY: The beans and products bounced Wednesday. I have few solid ideas here today. However, I am considering some fundamentals that I believe may be relative to market activity in the near term. The Chinese bean demand has slowed in June and will again most likely in July. We can debate the reasons, but the reality is this is happening. The demand is being pushed out to sept, oct. This will add bushels to the balance sheet. Approx 3-4 million mt. It appears the Chinese demand for meal has waned. This could prove significant and may slow crush for a bit. This slow down in demand has added to the SA bean stocks. This will mean more competition for the US. The weather has improved and looks to have a more favorable outlook in the coming week. It is true it is early in the crop year and more will be needed. In addition to the mentioned thoughts above, it is important in my humble opinion to remember the US at present is growing approx 30% of the global soy crop. This will continue to decline. Just as all oilseed growth will continue to increase globally at the expense of US supplies. It seems prudent to me to weight the global numbers in a much stronger light than domestic. Especially in years where there are global surplus. It is difficult to be the price maker when you don’t control the majority of the supply. The point, we are still at historically reasonable prices. Exercise Caution.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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