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(August 14, 1997) SOYBEANS: The trade was also shocked at the USDA's bearish estimate of the bean crop production at 2.744 B.B. compared to trade estimates of 2.683 B.B. This resulted in ending stocks being raised 20 M.B. to 305 M.B. USDA estimates yield at 39.3 BPA compared to 38.5 BPA in the July report. With the recent rainfall this week, many analysts are touting that yield could approach 41.0 BPA which could result in ending stocks reaching 400 M.B. However, it should be kept in mind that although growing conditions have improved lately, a lot can happen with the weather before harvest. Fifty-five percent of the crop is reported in the good-to-excellent category which is down 5 percent from the previous week. Eighty-nine percent of the crop is in the bloom stage while 62 percent of the crop is setting pods. Export inspections were disappointing at 5.7 M.B. while old-crop sales showed a reduction of 11,600 metric tons due to cancellations. New-crop sales totaled 193,900 metric tons. November soybeans were lower for the week as the market is still in a correction from last week's high at 667. Near term, it appears that the market could work lower to 595 before it is complete. Timewise, a trend change is due on August 19th or 21st which could be an important bottom if prices are lower. A rally above 621 is needed to turn the near-term outlook more positive. If this occurs, then look for a recovery to 635 or 645. Longer term, it appears that the market will remain in a trading range until the fundamentals turn more positive.
Dewey Strickler
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