This article is brought to you by:
CONSENSUS

ROSENTHAL COLLINS GROUP, LLC
144 2nd Avenue North, Nashville, Tennessee
877-853-2202

(March 28, 2002) SOYBEANS: The first question that comes to mind regarding USDA's estimate of soybean acres at 72.9 million acres is "what are they smoking"? This was well below trade estimates and 1.1 million fewer acres than last year. Furthermore, it does not exactly stack up considering the farm bill will not be implemented before planting and new crop soybean prices have risen sharply while corn is falling. I would not be surprised if they raise their estimate later in June. Soybean stocks were reported at 1.336 B.B., which was slightly below estimates. Overall, the reports are positive and suggest new crop carryover could drop below 250 M.B. However, the funds are holding their largest long position in 2 years and means most of the good news is probably already factored into prices. Export inspections last week were below estimates at 10.1 M.B. Furthermore, there were no shipments reported to China.

July soybeans rallied this week and the USDA reports could give the market enough ammunition for a move higher to 490 with 497-500 a possibility. If this develops, a top could occur as soon as next week but it may be as late as April 9th. Past history shows when prices advance from their March low, they usually top by mid-April. Although the seasonal tendency is for the market to remain firm until May, the rally began early in January and suggests we could peak prior to then. A sell-off below 470 will be negative and suggest the advance ended this week.

Dewey Strickler

Hosted by:
CONSENSUS, INC. AND INVESTORS CO-OP
P.O. Box 520526
Independence, MO 64052-0526
816-373-3700
Fax: 816-373-3701
editor@consensus-inc.com