wmeubank@ocp.kcmo.com
BRADFORD & CO., INC.
330 Commerce Street, Nashville, Tennessee
(November 13, 1997) SOYBEANS: USDA estimates soybean production at 2.736 B.B. compared to 2.722 B.B. Crush was raised 5 M.B. and exports increased 20 M.B. which resulted in a 15 M.B. reduction in ending stocks to 255 M.B. This is the largest ending stocks in three years, but consideration must be given to the fact that there has not been a slowdown in demand. Total production in Brazil and Argentina was raised 1.3 million metric tons to 43.5 million metric tons, yet a record crop is needed to meet foreign demand. Planting has been a concern in this region especially with the “media hype” regarding El Nino. Until the crop has successfully passed the pod setting stage in January, a weather premium is warranted in the market. Harvest is 91 percent complete compared to 89 percent last week and 90 percent for the five year average. Only the southeastern states have soybeans remaining to be harvested. Export inspections were 44.8 M.B. which was at the high end of expectations. January soybeans rallied to 748 this week which probably completed the advance from the October 30 low at 687. Provided this level holds, the outlook remains bullish. For the intermediate term, the market has become overbought and is subject to a correction near 715-710. Timewise, the correction should be complete around November 18-19. A rally above 748 will confirm that the sell-off is over and focus on the market advancing higher to 785, 805 or possibly 820.
Dewey Strickler
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