wmeubank@ocp.kcmo.com
BARNES BROKERAGE CO., INC.
30 S. Wacker, Chicago, Illinois
(October 15, 1997) SOYBEANS: In my 22 years as a trader/analyst, I've never witnessed a stronger contra- seasonal move than the one that just transpired in November soybeans. In just eight trading days, this new crop contract staged an electrifying $1.00 rally to 6-month highs in the middle of a record bean harvest. Clearly, this market has “made a statement” about its intentions in the 1997-1998 crop year that should be heeded by producer and trader alike.
October-USDA
October Avg Sept 1996
USDA Est USDA Final
Beans 2.722 BB 2.770 2.746 2.382
Carry-Out
BB–Billion bushels.
OBSERVATIONS AND FUNDAMENTALS–1.) Producer's Dream–Would be an apt description so far of this year's harvest–big, quick and dry with a $7.00 market waiting. 64% is in with the biggies (Illinois and Iowa) 85% done.
2.) “Cat's Out Of The Bag”–Yes, the wonderful fundamentals of the grain complex have been well-chronicled–you must establish longs with “staying power.”
3.) El Nino–Here And Now!–The much publicized international weather phenomenon is not just something that will effect us down the road–there have already been reports of planting delays in Southern Brazil–El Nino as we speak!
4.) Thursday's Delight–For the second consecutive week, Thursday morning's export sales (7:30 AM CST) in the bean complex have been huge–two weeks ago in beans, last week in meal.
5.) “Prying Loose Supplies”–Just how much rally will it take to get producers to do this! The $7.00 mark will attract some sales–but don't forget, (again) that we're the only game in town until late March (SA).
6.) Who Is This Guy?–Willard Sparks is up to his old tricks again issuing stocks and production estimates minutes before the grain opening–last Monday (October 13), he came out with corn stocks 25% over the USDA and bean stocks 25% under the USDA, numbers so off the wall the market seemed numb to them.
After its spectacular ascent, November beans seem to be catching its breath with roughly a 25% correction. Go with these corrections using our option strategy. The market action speaks for itself!
William D. Moore
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