Ag Time - Acreage is the Next Big Thing by John Walsh
Jun 26, 2018
The next major consideration will be acreage which is released friday. I dont have alot of new insights today. The market has experienced a significant break. Now, the market needs to digest this before the acreage report. It is also a time of year where the weather will become important if only for a psychological reason. We are due a rally. The rally, in my opinion, will present a hedging opportunity if realized. The bio fuel mandate was released today. No surprises. One more thought, there currently exists a tremendous incentive to crush oilseeds in general, but beans specifically. It is a rare opportunity, because of the currency differentials and the tariff considerations US beans are much cheaper than SA. I think you will see crushers lock up US beans, sell the deferred meal, and, or, sell the deferred crush margins which are at historic relationships. This could be crazy and interesting. Often times the same thing. Lets watch this. As always these are theories. So, if followed quantify your risk.
The Corn in my opinion has found a bottom. If this is a long term bottom is difficult to predict. The answer will be dependant on a few variables. The acreage report this friday is one to watch. The average guess thinks more acres. I am not as confident. We shall see. The Nafta deal will be impactive. It is my belief this will be worked through. When is the key question. Last, the weather domestically. We now enter a key time frame. The market will watch closely. It is however statistically difficult to kill the start we have. More improbable things have transpired though. In the end I believe corn can have a rally. Where it stops is dependent. Quantify your risk.
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