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The market traded both sides today. Obviously there are alot of considerations to understand. It appears the govt program to assist the farmer could equal 120-to as much as 150 per bu in payments. This is being considered as a one time payment. If this plays out, which I believe it will, it would put beans near $10.00. This will be a big help to the producer. This does, as I mentioned yesterday, put the beans in a long term bearish stance. Prices are down because we are over producing. There is every incentive today for the global planting to continue to expand. Having said that, the market may rally a bit here on a feeling of relief. With respect to China, it is my belief that China is, and will, contract. We are putting much pressure on them. It is difficult to expand demand in a contracting, stagnating economy. I believe the demand numbers in the last USDA report were accurate and will prove out over time. My question remains, when does the meal dominance end? I am in the minority, but am not bullish meal.
The Corn put forth a valiant effort today. Partially due to the world wheat strength. Partially because corn is friendly in its own right. The question for corn is how much will the USDA add to the yield. A 3-4 bu per acre increase could be negated with the demand. The exports should continue to climb. Given the present corn scenario the world will need to buy US corn. The feed grain scenario world wide is tight and further reductions may be forthcoming. Look for both wheat and corn carry overs in a historically friendly scenario.
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John J. Walsh
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