Soy Update

Commentary: The USDA released the stocks and acreage estimates today for March. The soy stocks came in at 2.253 billion. This was larger than anticipated. The acreage came in at 83.5 mil acres. This was smaller than anticipated by approx 1 million acres, but still up from 19 by 7.4 million acres. As mentioned over the last couple of days, these numbers may be received as friendly in the short term. It appears possible that the bean market can attempt a move to the insurance price of 917, or a bit higher. It is important to remember that the bean corn relationship is getting stretched, currently at approx 2.6-1. A move to 920 would move the relationship to 2.7-1. Given inputs and costs, those on the fence may opt to switch to a rotation limiting the corn acre increase. This would have a long term impact, stay tuned. The products today were mostly benign. The oilshare of late has lost.This is due to demand destruction in the bio fuel sector. This is real at present.There are many fundamentals fighting in the global vegoil market. The end of global quarantines and a bottom in the crude market will assist in finding a bottom. The bean oil market has moved to a much lower relative price than the meal market. The soymeal has been supported by the ddg market slow down due to bio fuel. In addition, concerns over Argentina not crushing to meet export needs. These are concerns and need to be watched. The Argentinian concerns are both economic and political and are concerns over Covid as well. Stay Tuned.

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John J. Walsh
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