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The soy closed lower with bean meal and oil all down today. The weather is improving and will be a topic of certain discussion. The beans are concerned with the improvement of the Brazilian crop. There also appears to be a shift towards crushing beans (which makes sense) rather than buying meal. When the margins are considered, this all makes sense. The market does not talk enough about the China stagnation of pork expansion. To me this if accurate and realized is the most important story. The meal has driven the bean market. This change would have lasting implications. Remains to be seen. The bean demand will suffer at the hands of Brazil, this too may be significant. If there is a shortage it isn't important, however we are growing global carryovers. The Argentinian crop failure forced a net loss this year but it took a 30% crop loss. The next crop season with marginal production will add over 10 mmt to the global carry. The bullish talk to me is a bit out there. The next key will be acreage, driven now by weather. It is important to note that global oilseed growth is up approx 9mmt. The world has no shortage of oilseeds.
The corn closed higher. The planting progress today will show a much slower pace than a year ago. The demand is picking up a bit. The corn projections for new crop show reason for a cautiously optimistic outlook into the future. Especially if there are any further weather delays. The downside in the near term could be limited to 380ish basis July. As always quantify a risk. If the corn acres remain the same or decline it is possible to see a significant global shift of corn vs beans. The corn could remain friendly while the bean scenario becomes burdensome. It is early in the season. Strong rallies should be used as hedging opportunities. Remain patient in the near term and let's see what may unfold.
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