AG TIME - Much to Consider by John Walsh

Published on: 00:19AM Dec 08, 2018

The soy has had a nice rally. It is important to realize that this is a historically high price given the stocks to usage. In addition, the current price is actually $1.60 per bu higher given the Administrations one time payment to the farmer this year.  The board is playing a bit of roulette here in my opinion. The market has dialed in the fact that China will start purchases again of US beans. However, what if this does not transpire? Or only transpires in a limited way? The window to actually need US beans is closing. The Brazilian crop will be ready partially for export come January. It is important in my opinion to note that the Brazilian pork and chicken production is in decline. This coupled with the reductions for Chinese pork will cut into protein needs. This equals more beans available. The Chinese meal market broke approx 7-8% this week due to this fact. As I say there is much to consider. Use this and further rallies to hedge beans. There are potential strategies that can be quantifiable. Buy puts and sell calls. Please call for specific trades. Each hedger has a different risk tolerance and any specific ideas will take that into consideration.

The corn continues to show some strength. It is my belief this will continue a bit more. The US still is in a good position as far as global price goes. There is still a window the US can be the important supplier. I call this a window because the next production cycle could potentially make the US less competitive. The next important aspect to consider will be the stocks next week. This could have a positive impact. The US stocks are friendly, in my opinion. The global acreage must be considered. As well as the fact that cattle production and demand for beef are on the upswing. This could become an important consideration.

Thank You all for the kind responses. To discuss this or any other thought please call 800 993 5449 or [email protected]



This block is broken or missing. You may be missing content or you might need to enable the original module.
This block is broken or missing. You may be missing content or you might need to enable the original module.