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(March 14, 2002) SOYBEANS: Widespread rain in Argentina this week helped to "cool off" the rally in soybeans. Furthermore, there is talk that foreign buyers may cancel U.S. purchases, pay the penalty, and switch to Brazilian soybeans, which are about 40 cents cheaper. News that China has worked out a deal with the U.S. in relaxing the waiting period of safety certificates of GMO soybeans to 30 days seems to be wearing off. This prompted massive buying from the funds last week of nearly 120 MB. Brazil is about 25 percent complete with their harvest and supplies should be available for export around the first of the month. Inspections last week were better than expected at 20.1 MB. However, the torrid export pace we have seen up to this point is beginning to taper off.

July soybeans retreated from last week's high at 474.25 and appear to be in a correction. Normally when the market bottoms in January as it did on January 2 at 425, a top usually occurs by mid-March. However, it appears there may be some further upside potential before a significant top develops. Near term support should be found at 463-460. Unless the market trades below 454, we could get a rally to 485 before there is a major sell-off. Watch for a top around March 26 -28 if prices are higher at that time.

Dewey Strickler

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