Soybean Market Outlook

November soybean futures have also shown a nice recovery rally over the last month or so moving from a low of $4.80 in late February to a recent high of $5.23. This rally is promising but is still short of a 38 percent retracement of the long sell off from last fall. The market has good upside targets at the gaps near $5.40, $5.55 and $5.65 if the bulls want to press their case. The Prospective Plantings Report may offer the bulls encouragement as USDA indicated farmers plan to plant 73.1 million acres to soybeans this year compared to trader's expectations of 74 million acres. While this is a record high bean acreage, if it comes to pass, it is less than expected. Georgia farmers indicated they would seed only 250,000 acres to soybeans, down from 300,000 last year and 400,000 in 1997.

Old crop futures may also receive a little boost from the stocks report showing only 1.46 BB compared to an expected 1.49 BB. This indicates either use was stronger than expected, or USDA overstated last year's production. Either way, this is good news for a market that needs good news.

(George Shumaker)

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