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(September 25, 1997) SOYBEANS: Activity in the soybean complex was mostly sideways to lower as the market found pressure from light pre- harvest sales along with lighter-than expected export sales. The USDA indicated on its recent release that soybean production will be 2.746 billion bushels which would be 9% larger than the record crop of 1994. So even if USDA is off by a little it would more than insure a record crop this year. If this figure does come to fruition it will case the very tight stocks level 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 due to timely rains during the, very crucial time in most of the largest soybean growing area. The export market remains very quiet and it seems of late that many countries have canceled old crop sale as they anticipate that they will be able to buy new crop soybeans at lower prices levels in the near future. Overall, market internals remain mixed and with the U.S. crop estimated to be of record proportions overhead pressure should remain intact as long bad weather does not rear its ugly head. Technically, November soybeans remain in a downtrend the trend would turn up on a close above $6.52.
FUTURES STRATEGY–Sell SX at $6.30 or better. If filled enter a protective buy stop close only at $6.52½.
OPTIONS STRATEGY–Short SX $6.50 call at $0.10 or better, Enter a protective buy stop at $0.26.
Tony Montini
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