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AG TIME - Corn Turns


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I was looking at the charts today and reading a few articles. It is true the markets have been in broad ranges for quite some time. The soy to me has traded on borrowed time. The market has been held up and bounces off of support (seemingly always) based on fund desires and a hope that something bullish is out there. I cannot find it. The exports are way behind, the Chinese purchases are on the decline. I don't see the relationship on the board that will drive away bean acres. This may be a surprise to the market in the USDA outlook forum. The market has had a couple friendly inputs. The Crush margins are one. The crazy high margins (my opinion) have kept the crush pace at or near record. Well, the chinese meal is trading at multi year lows now. Due most likely to the curtailed meal demand from swine flu. This also in my opinion is not dialed in. What happens when meal backs up and the margins tumble and the crush needs to slow. This is coming in my opinion. (time to watch oil spreads, perhaps) Then we have slow exports a declining crush and huge stocks. There are many structural issues here that need to be watched wishing and praying are not trade ideas in my opinion.

The corn had a slight rebound. Wow corn bounces in a begrudging fashion. Difficult for me to understand. The President is making open promises in the way of purchases from China. If this materializes, a big positive. Then if the acreage increase for corn stays modest. ( It is my belief that will be the case) Then this market has a story. A carry with good weather of potentially 1.4-1.55 billion bu. This is not a $3.50 board number. Rather some risk premium should be built in. Dont loose sight of the fact that the exports are a healthy clip past expectations. The Ethenol margins are solid,Also, animal numbers are big domestically. There remains a optimistic view on corn in my opinion. Corn has been the follower to beans for some time. Perhaps the next 12-18 months corn will have a turn in the drivers seat.

800 993 5449 or jwalsh@walshtrading.com I appreciate all feedback. Give a call to discuss opportunities/risks through the year.

ANYONE WHO EVER GAVE YOU CONFIDENCE, YOU OWE THEM ALOT TRUMAN CAPOTE FROM?

BE WELL



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About the author


John Walsh, President, Walsh Trading, Inc.

John began his career in the futures industry in 1986 at privately held firm, Barnes and Company. Barnes and Company was known for its presence at the Board of Trade, particularly in the agricultural sector. From Barnes, John held positions at the privately held firm, Argus and then at Continental Grain. During his time there, Continental Grain was one of the largest clearing firms in the world. Continental Grain had, and continues to maintain, extensive holdings in the cash cattle, poultry, swine, and agriculture industries. At Continental Grain, John had various responsibilities including working for the Options Group and the Risk Management Group where he serviced clients located all over the world.

 

In 1996, John left Continental Grain to found Walsh Trading, Inc., currently a registered Independent Introducing Broker (IIB) and an NFA member with the ability to clear at multiple, futures clearing merchants at the benefit of its clients. John’s focus at Walsh Trading has been on hiring and cultivating talented individuals and building relationships throughout the industry. Walsh Trading services some of the largest companies in the world, in their respective fields, as well as individual investors with a commitment to always putting the needs of its customers first.

 

John trades all markets, but concentrates his efforts in the agricultural sector, more specifically in the relationships revolving around the soybean crush. His trading methodology is based on fundamentals and a personally designed technical system.

 

Contact John
Phone: 312-208-8837 or 800-993-5449
Email: jwalsh@walshtrading.com

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