The prolonged Argentinean farmer strike is more bullish to USA basis levels rather than futures. News out of India over the weekend of possibly reducing or eliminating import duties on soybean oil is fundamentally bullish. Bearish to soybeans is that there is no official word as to potentially how much soybean oil previously contracted with China has been canceled. Weather is forecasted to be near ideal for Brazil and Argentina crops over the next ten days.
We will hold hedges of new crop soybeans at 40% of anticipated 2008 production at this time and alert you when to resume making additional sales. Allendale must point out the long-term up trend for soybeans, which began on 8/16/07 was broken for the first time on Thursday 3/20/08 and is now within a dollar of the key 200-day moving average. We plan on using the break to cover present hedges with call options at a chart consolidation point to be identified.
July soybeans have immediate technical support at 12250 and resistance at 13000, with the technical trend down. The November futures have technical support at 11400 and resistance of 12250, the technical trend is down also. July soybean oil has immediate technical support at 5650 and resistance at 5800, it likewise is technically in a downtrend. July soybean meal has immediate technical support at 3250 and resistance at 3400, and yes it also is technically in a downtrend.
Allendale fundamentally is bullish to soybean, soybean meal and soybean oil futures, but technically we are bearish. Like corn, we are willing to sell corrective rallies but will utilize a risk-reverse, just in case investment funds regain consciousness regarding tight supplies and increasing demand for protein and vegetable oils. Please consult an Allendale representative for the specifics.
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