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I find much of the market perplexing. There are things that don’t add up, in my humble opinion. The soy complex is so oversupplied. The market has never had a supply like this. Unprecedented. Yet, prices are still high relative to the historic norm. Not my norm. The norm in the market. Based on stocks to usage and carry numbers. The market wants to discuss a slight drawdown from the southern hemispheres expected numbers. Still a record production. Still a record global carry. The US will have close to 1 billion bu. That’s right 1 billion. 350-400 million is large. The global protein market is amply supplied. Competitive meals moving to China. Where by the way the protein demand is contracting. Yet, meal remains fairly stout. Why? I hesitate to be a conspiracy theorist. To say I think meal is way overpriced on the board would be an understatement. These represent my opinions and thoughts. I do find it perplexing.
The corn disappoints. The wheat has not followed through to the upside. Rather a retest of recent lows. The feedgrains are where there was some hope. It appears perhaps it is time to expect less. Smaller moves in feedgrains. Cash sales within ranges. The corn is not tight from a carry. However not oversupplied. The US in an interesting situation. The corn bean relationship does not financially buy corn acres yet. The US demand remains strong for export. Perhaps China will buy some corn. This would be a spark. There has been talk now regarding this. Talk is cheap however. It is my belief corn will gain on beans. It is my thought a ratio of 2.2-1 is needed to shift to corn. Happy New Year.
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