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(August 14, 1991) SOYBEANS: Activity in the soybean complex was mostly sideways to lower as the market was pressured by decent rains and a USDA report which should the possibility of a record crop. The USDA indicated on its recent release that soybean production will be 2.744 billion bushels which would be 9% larger than the record crop of 1994. If this figure does come to fruition it will ease vary tight stocks levels of 125 million bushels during the past year swelling them up to 305 million bushels. It looks more likely that the record production will take place now that timely rains have fallen at a very crucial time in most of the largest soybean-growing areas as pod setting begins. The export market remain very quiet and it seems of late that many countries have canceled old-crop single as they anticipate that they wall be able to buy new-crop soybeans at lower prices levels in the near future. Overall, market internals remain weak and with the U.S. crop estimated to be of record proportions coupled with the fact that the weather has been ideal should keep price action under pressure. Technically, November soybeans remain in a downtrend; the trend would turn up on a close above $6.56.
FUTURES STRATEGY–Short SX at $6.20; maintain a protective buy stop close only at $6.45.
OPTIONS STRATEGY–Short SQ $8.75 call at $.10; maintain a protective buy stop at $.23.
Tony Montini
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