COMMENTARY:
BEANS – The bean market was moderately lower today. Of note is the recent two week climb. The beans have rallied in tandem with meal strength. The overall thoughts of inflation, recent Chinese purchases have propelled the bean’s to a higher level. The fundamental long run in my opinion remains more bearish than is reflected on the board. The Chinese purchases from the US are modest. The demand remains subdued and will see the carry close to 400 million bu into next year. The South American crops are off to a fine enough start. The point, let the market heat up due to the global concerns. Producers take advantage of near term opportunities before the new year.
MEAL – The soy meal market has been the leader of the soy complex. There are a couple reasons for this. First, the global meal market has been supported on a slower global crush. This has made protein a little less available. The US market is supported on a lack of lysine available. The thought is the ration for feeding will move towards meal. This is true, and will now be a question of price. The question also is how much is necessary as the global suppliers appear to be holding supply from the market. The meal is sensitive both on the supply side and related to price. The oil does not suffer the same scenario due to the ability to store the product. The meal needs to be watched closely, as well as the current global slow down due to the covid concerns.
OIL – The vegoil market is in an interesting situation. There remains a tightness in certain oils, while others are well supplied. The US domestic market has gone from tight supplies to ample. The Canola, and palm oil remain supported as well as sunflower oil. These not necessarily due to supply. Rather the producer is holding sunflower oil. The palm is slowly being replenished. The canola remains tight due to the Canadian situation. The bean oil was down today however, on concerns over the crude with the global slowdown, and also bio demand is off this month. Look for veg oil oilshare to decline until meal is done with its surge.
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BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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