June 30, 2008
July: 1605 up 23 1/2
Nov: 1574 up 14 1/2
July futures hit an all time high today of 1607 1/4.
The report appeared bearish on the surface. Planted acres were estimated to total 74.533 million, which was 276,000 more than the trade guess, and quarterly stocks of 676 million bushels were 13 million more than the trade guess. But the USDA's harvested acres projection of 72.1 million would seem to indicate that the carryout is still going to fall to pipeline levels, and that a price has to be found that will ration out the supply.
No change in strategy. We have 50% coverage with put options, and will add to that on a weather scare or a significant rally.
The national average basis was a penny weaker at 79 under July.
Export inspections of 18.4 million bushels were above the highest trade guess. Cumulative inspections are just above year-ago levels, compared to nearly even the previous week. The USDA projects exports will be down 1% this marketing year.
The CEO of Oil World says that global vegoil prices are likely to remain high in coming months, although high prices are starting to hurt demand. He also said that world vegetable oil production in the future would not be large enough to meet global biofuels targets. Governments will have to reduce those targets or face dramatic shortages of cooking oil.
Crop conditions improved slightly, with 58% rated good to excellent, up 1 percentage point from last week.
Ninety five percent of the crop has been planted, compared to 91% last week and an average of 98%.
That's it for now!
Jeff
The information contained in this letter, while not guaranteed as to accuracy or completeness, has been derived from sources believed to be reliable and arrived at by careful consideration. Losses as well as profits are possible, and market conditions can change rapidly. Any trade recommendations included in this letter are the opinion of the author, therefore the use of this information and advice is the sole responsibility of the user.
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