wmeubank@ocp.kcmo.com
COMMODITY RESOURCE CORPORATION
400 South Fourth Street, Minneapolis, Minnesota
(March 26, 1997)
SOYBEANS: OUTLOOK
"The Brazil soybean harvest is progressing at a rapid rate. By the time you read this it should be past the half-way mark. Yield reports are good. Recall, the past few months the bears have been telling us this large South American crop would cap the market. First at $7.25, then $7.50, then $8.00, and finally at $8.50. We, however, felt the world supplies were tight enough to gobble up this South American crop without halting the price advance. Thus far, we've been right and the bears wrong. What now? I believe the market has discounted the Brazilian crop and will now turn attention to the North American new crop. This year could be more sensitive than any other to weather scares. Prices should be supported well into June, and any weather problem will result in a wild bull ride, perhaps to `beans in the teens.' Should be an interesting spring and summer.
STRATEGY"
HEDGERS:
We previously took net profits of up to $1.10 in March and May bean calls. We then rolled into the July 850's for 40-45 cents. Hold. This is your replacement for cash sales made last harvest. No new-crop hedges are recommended at this time.
TRADERS:
Based on a recent recommendation, we
are long July futures from under $8.31. Risk to a close under $8.10 for
an objective above nine dollars. This is a high risk/high potential trade
not appropriate for everyone.
George Kleinman
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