Break on Through to the Other Side

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Soybeans sailed right on through the $10 mark. The underlying fundamentals have been stacking up for a while now with increasing demand and falling supplies and since August have manifested themselves in a huge push upwards of the price. No doubt, the falling dollar and the continued march upwards of wheat have also been a major influence and today was no different.Wheat made a new record today at $9.3925. If the fundamentals are strong in soybeans, then they are doubly so for wheat at the moment. It is possible that what we have been seeing in wheat recently will be happening in soybeans next year. This all depends on how the planting goes in the coming months. If wheat continues upwards as it might do and reach its own $10 mark, then soybeans are going to be hit hard and won’t be able to recover the 5 million acres that it needs to.

The new record in wheat doesn’t evoke much regret anymore and I’m starting to think that perhaps I should get back in with a new long position. Then again Jim Rogers has already stated earlier this week, that he wouldn’t buy wheat at the moment; “I don’t like to jump on a moving bus.” I respect that man’s opinion. So I start thinking should I be entering a short position in wheat, before I finally come to my senses and remember that I do have a plan and any time I have strayed from that, the result has been serious damage to my account.

Back with soybeans, the USDA reported export sales at 745,600 metric tons, nudging close to the upper end of estimates. A new three year high was hit at $10.1775. Prices were last at this level in May 2004, when it hit a high of $10.64. Prices are still a bit away from that but the March and July ’08 contracts did reach $10.41 today.

Tomorrow is another Friday and there is another report due out from the USDA, this time on grain stocks, so there is some new info for the market to play with but the consensus appears to be that there will be no suprises. So I’m expecting the usual short-covering towards the end of the day tomorrow following this week’s continued action breaking upwards.

Open Positions

Asset Contract Position Change
Soybeans November 2007 Long +18.63

Account Details

Account Balance: €271.48
Open Position P/L: €583.52
Account Position: €855.00
Overall P/L: -€1195.00
   

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