Old-crop bean and meal values dropped sharply last week when it was announced that Cargill--the world's largest private corporation as well as the world's largest commercial--would import soybeans from Brazil to meet the needs of their domestic crushing facilities.

That is the news that caused old-crop bean values to collapse.

However, the very fact that the world's largest and most influential commercial is having difficulty finding soybeans to crush has to be on the surface, as bullish a sign for old bean and meal values as there is. All the talk about old-crop beans declining even more will cease when and if

1) Cargill cancels the Brazilian purchases,
2) new export business surfaces for old-crop beans,
3) weather problems surface or,
4) if old-crop bean values turn higher simply due to tight stocks.

Old-crop beans still have the potential to rally sharply and rise to double-digit levels by late summer. Cargill, in their press release, basically admitted that old-crop beans for use this summer do not exist. Stocks are that tight!

June 8, 1997
Jerry F. Welch,
Publisher Commodity Insight
152 Ennis Lake Road,
Ennis, Montana

Relocated 06-13-97
Last updated on 06-13-97

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