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I am finding some perplexing aspects to the soybean market. This is not necessarily anything new or different. Just a verbalization. It appears there are those that still would like to attempt to find something bullish in the soy complex. In my opinion, without a major global disruption from a weather problem, or some unseen act of God event, the bean market numbers are a record and bearish. The market has rallied approx $1.00 per bushel off its low. This has set up a sales opportunity. Here and now in my way of thinking. In addition, the meal market has a lot to deal with. Three cases of swine flu have been detected in China. Take heed, they are 1000 miles apart. It is my belief they can’t contain these issues and more cases could well be forthcoming. It appears to have traveled. If this spreads, it changes the whole game. Why do the funds or commercials want to push the long side of meal? The commercial answer is easy. In a bearish market they have unusually high crush margins. As mentioned last week, I don’t think beans will take their recent highs out. To reduce the bean carry below 600 million bu seems very difficult at present.
The corn under pressure. Perhaps the wheat was a weight. The corn in my opinion is the most friendly thing on the grain board. This obviously means little. The global scenario will keep the US in a strong position. It is my belief breaks should be bought. I think, given the outlook, corn can still trade up and potentially over $420. bu. These micro breaks are opportunities for the user to extend coverage. The producer should sell rallies so be patient in here today.
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