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Have -- the closing -- This morning's USDA crop report sparking a rally in -- today corn soybeans -- -- -- higher after the report showed a drop in global grain inventories.
But is -- still time for investors to cash in on -- crops rally.
Here's your weight is way important executive director of global agriculture commodities sector strategist at UBS wing is great to have you back with us I'm interning in -- -- now -- -- What strikes me is that you say the US actually may run out of soybeans next year why's that.
Yeah that's correct -- announce -- defense question the answer is yes.
There's still time to people -- getting to this rally.
Effectively the United States is the last provider of soybeans for this year.
Now we're basically waiting at the ministry of the Latin American produces to come to market -- -- So -- force US soybeans are in strong demands we've seen really strong interest on forward export sales.
So -- suspicion news if we exported an average price would actually run out of beings come around died for my next year.
So when -- we know if Latin America make up the gap.
And save us for those of us were dependent on our soybeans.
Yeah I guess look the way the is basically it's.
It's -- now in the sense that.
We have a weakening and -- -- -- pets in which tends to mean in Latin America we have less rainfall -- more.
And so what that could actually mean -- the January potentially could be draw.
So do we are looking at higher risks for dry January which would be devastating for soybeans so we're just sitting on the address -- until we get through January.
OK -- -- said they're still money to be made so when you're back.
On with us in August you said he told me that you were short add equities and long act commodities.
But that would switch that strategy the end of the first quarter of next year -- -- strategy changed.
The comes to looking at the same strategy -- I still expect to see -- prices fall significantly by the end of next year.
So as a result you'd expect to see margins.
At their worst for a lot of these fourteen companies.
Over the next couple of quarters.
Once we get out of quarter one -- -- -- -- she -- some bit of prices.
That means we expect to see enough lifting margins for these companies we also expect to see lifting -- prices.
So US consumers haven't seen the -- front of this drought yet so we still long the commodity was too -- -- critique.
The drought -- -- the story this season without a doubt playing it seems as if it was just much worse than anyone ever anticipated and to your point it seems like.
The impact hasn't been fully felt yet.
No I think the market is front I think the market gonna be comfortable.
I think they looked at some of the anecdotal reports coming out of the hardest.
Things start to look a little bit what they didn't account for was the very strong demands of these high prices.
What that means is we need to see ongoing high prices to -- these demands.
Otherwise we just simply -- -- -- -- -- to go around.
Wayne Gordon unfortunately have to leave it there thanks so much for your analysis not through it.
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