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I would like to say that expensive and or cheap has no reality in the marketplace. The markets will seek a level either up or down that in is line with the overall supply relative to demand from a historic perspective. That is not to say that there arent times of erratic movement; there are. It is, however, my opinion that the markets will dial in all known fundamentals and seek a level over time. This tends to remain in motion until a change in the market that will enable a change in direction.
The soy bounced today. I indicated in my writing Friday that I think the soy is close to a short term low. The length of the rally is dependent on a couple outside factors. Certainly the trade disputes, and also the crop conditions. The rally is an opportunity to make further sales. The meal is the market that now is of interest. It is my belief that the meal on a relative basis is way overvalued. The USDA indicates a carry of 400. Not a regular occurrence. Meal is a pipeline product. Crush and use. The crush is running at a record. This will burden the market with meal. When? It may take early harvest for this to transpire.
The Corn was quiet. I dont understand this. The corn has broken almost as much as beans on a 2-1. The corn has the friendly demand story. In addition there are pockets of dryness that are pushing corn conditions to a level that should be of concern. The average analyst is dialing back the huge yield thoughts. Thinking trend line now. The USDA numbers give us a 1.5 bil carry. This will be tight for 6-12 months. I still believe corn has a rally here that is a nice opportunity. The user of corn should be buying this break. The producer, be patient. Look for higher prices to hedge.
TO BE IS TO BE PERCEIVED BISHOP GEORGE BERKELEY
John J. Walsh
President, Walsh Trading, Inc.
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