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ALLENDALE, INC.
4506 Prime Parkway, McHenry, Illinois
(August 8, 1997) SOYBEANS: ALDL is forecasting a trend yield and crop of 2607. Everyone else is coming in 100 mil. bu. more than us. If they are right, then beans could move to 500 at harvest. If we are right, then 575 should hold. Our carry over estimate is 207. After the harvest low is in, Brazil's need to import should cause a rally. There is however, talk that China may have overbought 1.0 mmt of beans. If this is true (and there is a good argument to support the idea), then we would have to increase stocks as we lower the PRC demand. World stocks however, remain at record low levels. Any crop uncertainty could still have a major impact on the market and thus this week's weather is very important. Once the U.S. crop is “fixed” then it will be a matter of getting it out of farmer hands and into the commercial shippers hands. After October/December, then the Brazilian crop will begin to impact the market. They are currently expected to increase their acreage substantially and will therefore dig into our export pace for next year. If the forecasted rains develop, then expect a wicked sell off as it seems everyone has bought this weather scare. We bought beans against strong support at 632 and then scratched the trade Friday when support was taken out, private estimates were so much bigger than ours and forecasters called for rain.
Bill Biedermann
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