COMMENTARY:
BEANS – The beans were a bit on the defensive today. The harvest progress is rolling along at 92%. This contributed. In addition the weather in South America is very good. There are rains forecast through the next week that will further development. It is clear the crops in Brazil look very good. The Argentinian crops are good but in need of more rain. It is important, in my opinion, to realize the early harvest will produce beans in December for export. The US will begin to lose overall share in the months ahead. It is my thought that the domestic carry will swell to 400 million plus. This with the global carry creates a bearish stance. The market has yet to respond to this. Look at rallies as selling opportunities.
MEAL – The meal was under a bit of pressure today. The recent has shown a strong board both flat price and relative to meal and beans. There is concern over shortages of Lysine in the US market. This could potentially push meal use in feed rations. The meal in general is also finding support due to the lengthy overall weak prices. This led to a pick up in demand. It is important to watch price now as meal is a price sensitive commodity as long as there are options available. The issue today is the availability.
BEAN OIL – The bean oil has traded in large moves over the last few days. Although the market is generally in a sideways range. The oil share has fallen recently as the stocks are replenished. The domestic market is approx 1.9 bil lbs. This is more than ample at present. In addition, the crush is running at a near record pace due to margins. This will continue for the next quarter, especially as the price remains elevated in beans. Look for the bean oil stocks to be ample to larger. The palm oil also will be key. Although the stocks here are building slowly due to the sunflower oil from the black sea, which has yet to show large availability. It is my belief the highs are in in the bean oil, unless a large problem exists in the future.
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BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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