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Ramon:
But what are the farmers
>going to plant this year? More beans. Why?
That's a good question.
I asked one of my clients who is a farmer. Even though farmers can barely
breakeven at the prices the government will guarantee, he still has a
mortgage to pay (land and equipment). He can't just be idle, or he will
lose to the bank. It's better to breakeven than to lose, so that's why
he'll continue to grow beans. Some farmers in the south can switch to
cotton, but up north it's too cold for cotton, so they're stuck with growing
beans. Beans are also easier to plant than Corn.
I stick to the charts also, so my fundamental knowledge is very limited.
But I was wondering about the same thing as you, so I had to find out.
Mark Morrison
mmorrison@xxxxxxxxxx
-----Original Message-----
From: r slupsky <zzorro@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Thursday, February 25, 1999 4:06 PM
Subject: Soybeans Fundamental?
>I don't really follow the news. I stick mostly just to charts. So
>maybe some one can explain this. Soybeans are at 24 yr lows. Needless
>to say supply is much greater than demand. But what are the farmers
>going to plant this year? More beans. Why? Something to do with a
>Bank Loan that gives them $5.26bu (which is the cost of production ?)
>And that is more than $2 for corn or $2.50 for wheat. Is this
>something that they have to pay back? Or is it some kind of
>subsidy? If any of my premises are incorrect please correct them for
>me.
>
>thanks, ramon
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