Soybeans and buying protection

The bean market continues to be supported by calls for lower production out of South America and prospects of a reduced U.S. planting report. As a BEAR IN BEANS who has sold a lot of beans between $6.10 and $6.35, I'm frankly a little surprised that the market has been so firm. The key issue that

now needs to be answered is whether you should protect a short position. Frankly, as a technical trader, if the market were to close above $6.36, it could move to $6.50 on short covering and speculative buying. The only way November beans can move above $6.50 in our opinion is on confirmation of a major surprise in bean acreage plantings (down 2 million acres) and some type of rust event this summer.

,br>At this time, we suggest the cost of insurance is greater than the upside risk. We would continue to focus on making catch-up sales at current values and NOT DEFEND cash sales. In fact, if the market moves into the $6.50 for 2007 beans, we would start some modest long term sales.

SPECULATIVE RECOMMENDATION: We feel selling with a trailing stop is better now than top picking. Let's make sure the market is correcting before adding a position. Second, I want to get past the May supply/demand report next week. I continue to believe most of the bullishness will be factored into the market before the report.

If you would like me to help you implement a long-term marketing plan, give me a call at (800) 832-1488. If you have any questions or would like to read more of my recommendations, e-mail me at laura@utterbackmarketing.com.

The recommendations and opinions contained herein are based upon information from sources believed to be reliable. However, that information may be incomplete and unverified. There are numerous factors that can affect the markets, which cannot be fully accounted for in the preparation of these recommendations. Those following these recommendations do so at their own risk. The firm and/or customers of the firm may take a position that may not be consistent with the recommendations herein. Any recommendation does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any commodity interest. Commodity trading involves risks, and you should fully understand those risks before trading.