wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(December 18, 1997) SOYBEAN: Activity in the soybean complex during the past week was very weak as pressure stemmed from lower exports and news that the South American soybean crop indeed reach record proportions. As had been expected the foreign interest that had supported the market has weakened and the results have not been good for price activity as the markets neared three-month lows. The products also have suffered as world prices are more competitive and therefore, demand has gone elsewhere. The complex also appears to have turned its attention to the growing season in the Southern Hemisphere as early planted problems have eased with recent reports indicating 90% to 95% of the crop is in the ground and moisture has been excellent up to this point. A recent release by the Brazilian Agricultural Minister indicated the 1997-98 soybean crop could total 31 million metric tons which would be more than 18% larger than the 1996/97 crop. Overall, market internals do not took great with tight supplies behind the market it should now focus on the now crop in South America and the problems of exporting the recently harvested U.S. crop. Technically, March soybeans are in a downtrend; the trend would turn back up on a close over $7.02; the close below $6.94½ basis March soybeans now targets the market to the $6.39 level.
FUTURES STRATEGY–Short SH at $7.35, move the protective buy still close only down to $7.03½.
OPTIONS STRATEGY–Short SF $7.75 call at $.07. Maintain a protective buy stop at $.19.
Tony Montini
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