wmeubank@ocp.kcmo.com
IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
(November 24, 1997) SOYBEANS: This past week has seen soybean futures slowly erode from a high of $7.31 a bushel for January basis to a level flirting with the $7.00 range. For the past several weeks now, I have recommended going short this contract and will continue to do so until there is some positive news in the market to change my opinion. There just hasn't been any recent support from the commercials (elevators and processors) or the funds (large securities or commodity firms) on the buy side. Therefore, a little bit of selling pressure and the market retreats as the buyers stand aside.
The South American crop has been estimated to be 50 to 60 percent completed with favorable weather patterns this past week. That is on schedule for their planting season and continues to put pressure on deferred bean futures contracts such as March, May and July 98. The Asian monetary crisis still lingers combined with new developments such as Korea's request for assistance from the International Monetary Fund and Yamaichi Securities failing in Japan. These things lead me to believe any export news will not look encouraging for the Pacific Rim region. Union Pacific is still 4 to 6 weeks behind on rail shipments of grain in the western United States corn and soybean belt due to a rail car shortage and American farmers produced a record 2.72 billion bushels of beans for the 1997 crop year further depressing prices.
RECOMMENDATION–Again, I suggest the short side of the bean market.
Rick Schultz
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