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(March, 2002) SOYBEANS: Soybeans closed higher in the month of January, although the close was nearly on the bottom of the monthly range. Because of that, the timing issue for February was confused. The result has been a few weeks of rally that stayed inside the trading extremes of the previous month. Essentially, that provides nothing in the way of performance related information. Beans are at the bottom of a multi-year trading range and that is a poor place to carry a bearish attitude. The trend is still down on the monthly chart, but the risk of being short is about the same as trying to pick a bottom. The last rally top for May soybeans is 4.61 and anything that happens below that number will have no bearing on the larger bear trend. Seasonal pressures are somewhat friendly during March, so finding a place to scalp on the long side will probably be the most productive attitude.

SOYBEAN MEAL--Soybean meal came through with a huge rally in January and the activity since then can be construed to be corrective in nature. The key price to watch is the fifty percent resistance at 154.70. A truly bullish profile requires a weekly close above that level. The risk of ownership in the May contract can be expressed as a close under 146.

SOYBEAN OIL--The small recovery during February does soybean oil no particular favor. It creates a bearish combination of three and seven down "but" monthly cycles. With that kind of back drop, it is unlikely that the nearest contract will be able to rise above 1650 in the weeks ahead.

 

Dave Norton

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