COMMENTARY:
SOY
BEANS – The beans reacted in a sharp way. The WASDE report confirmed more beans domestically at 340 million bushels. They are stair stepping towards what I think will be close to 400 million bu. Apparently the trade thought the world numbers were surprising at 103.78 million tons. Yes that’s right. Please look at where we were the last time the global carry was here. Its lovely, and the markets are looking at many different things. It is my thought with a declining global demand and a larger global crop, beans are near their high. This of course is dependent on the South American crop.
MEAL – The global meal market at present is well supplied as the crush has been profitable. The thoughts I have regarding meal remain the same. There is reason to look at a slowing crush. In addition the US meal demand is picking up relative to supply. The meal while ample is not a burden. The recent rally was justified but I believe has a limit. Look for meal to now slowly gain on beans and oil.
OIL – The bean oil has been under pressure. The market rallied on the WASDE. Looking at the numbers today, and the current fundamentals, the bean oil will continue to struggle. The global carry in general for all oil and fats is becoming ample, albeit slowly. The domestic carry jumps to 1.9 billion lbs. I’m sorry close to 2 billion is not 60 cent bean oil. Perhaps I am wrong. The point, look for bean oil to grind lower as well as the oil share to grind lower.
Quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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