wmeubank@ocp.kcmo.com
(May 5, 1997) SOYBEANS: This is a weekly bullish close and could mean another 50-cent move is in the near future. Thursday, the July contract invalidated the head and shoulder top but now needs to close above 895 in order to remove any speculation about a double top. Nov. futures still look very bullish and could have less risk than the old crop. Fundamentally we can argue how bullish demand is and that we have not rationed (we need to have 32 mil. bu. demand, not the 39 it is running), especially with the Owensboro news.
However, we can also argue that fundamentally, with the $13 margin between U.S. and Brazil beans, there could be more imports which would temper the shortage until August. We were stopped out of our shorts this week. We will trade either side, but favor the long side. New crop is clear cut. Based on our assumption that we will not get the 68.8 mil acres planted, we are bullish. We are long calls, futures and meal, meal and meal. Our economic objectives of 800-850 beans and 290 meal remains in tact. No hedges yet.
Bill Biedermann
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