COMMODITY INSIGHT
152 Ennis Lake Road, Ennis, Montana
(October 5, 1997) SOYBEANS: The two most bearish months of the year for the entire big four (stocks, bonds, currencies and commodities) are February and October. Generally speaking, February is the most bearish for commodities but October is the most bearish for stocks.
When either one of those months roll around, any market at any time can take a hard break. And more often than not, the markets drop to levels last seen months ago. But there is a flip side to both a bearish February and a bearish October. From a historical perspective, hard breaks during either month generally present aggressive and imaginative traders with some excellent buying opportunities.
On one fateful day in October, 1987 for example, the Dow fell 200 points one day and 500 points the next. And on that fateful day, soybean prices fell 20 cents a bushel out of sympathy to what was going on with the mighty Dow Jones.
But the low set that day for soybean prices lasted until the spring of 1998, when nearby futures rose to more than $10.00 a bushel. Granted, prices rose that high primarily due to Mother Nature and the one of the worst droughts in American history. But the fact of the matter is this: Hard breaks for most any market during October or February are generally buying opportunities.
This month, the entire grain complex will set a major low and march higher until the summer of 1998.
Added to the WWW 10-10-97
Last updated on 10-13-97
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