54
SHORT SOYBEANS
FOR SUMMER
After planting season has finished through the
bean belt of Illinois and up through Minnesota,
soybeans tend to post a seasonal peak. Once the
crop is actually planted, the fear of a reduced
crop size due to planting delays from late spring
storms has abated. When the crop is in the
ground, traders start focusing on the potential
size of the new crop. In addition, supplies are
available from the South American harvest, and
this puts additional pressure on prices.
By mid-June we have a good understanding of
the crop size due to what was planted. Under ideal
weather conditions, traders tend to sell the market,
as producers and grain elevators start hedging or
forward contracting out their crops production.
This marketing effort can last through harvest time.
The new genetically modified (GMO) seed,
Roundup Ready by Monsanto (MON), is more
resistant than ever to insects and drought or heat
stress. In addition, there has been more worldwide
acceptance of this technology. U.S. farmers have
increased usage and production to over 85% of
this variety. This may explain why, under normal
weather growing years, prices tend to decline, as there
is a better estimate of the crop size.
The chart below has the fertilizer company
Mosaic (MOS). Traders looking to capture moves
in soybeans may want to explore taking out posi-
tions in companies such as Mosaic that tend to
correlate to the commodity’s seasonal price
moves. See pages 133–138 for additional corre-
lated trades.
Chart courtesy TradeNavigator.com
SOYBEANS (S) BARS AND MOSAIC (MOS) CLOSES
(WEEKLY DATA JANUARY 2009–MAY 2010)
ENTRY EXIT PROFIT/
YEAR DATE CLOSE DATE CLOSE LOSS
1970 6/5 266 1/4 7/28 286 988
1971 6/7 310 1/2 7/28 331 1/4 –1,038
1972 6/7 339 3/4 7/28 337 1/2 113
1973 6/7 853 8/01 872
–950
1974 6/7 537 1/2 7/30 865 –16,375
1975 6/6 478 7/29 627 –7,450
1976 6/7 609 7/28 631 1/2 –1,125
1977 6/7 832 1/2 7/28 577 1/4 12,763
1978 6/7 666 1/2 7/28 621 3/4 2,238
1979 6/7 753 7/30 711 2,100
1980 6/6 631 1/2 7/29 762 1/4
6,538
1981 6/5 727 3/4 7/28 746 1/2 –938
1982 6/7 642 1/2 7/28 602 3/4 1,988
1983 6/7 626 7/28 720
4,700
1984 6/7 755 1/4 7/30 609 1/2 7,288
1985 6/7 580 3/4 7/30 519 1/4 3,075
1986 6/6 513 7/29 503 1/2 475
1987 6/5 570 7/28 534 3/4 1,763
1988 6/7 886 1/2 7/28 748 1/2 6,900
1989 6/7 647 3/4 7/28 604 1/4 2,175
1990 6/7 612 1/4 7/30 593 3/4 925
1991 6/7 587 1/4 7/30 580 363
1992 6/5 614 1/2 7/28 559 3/4 2,738
1993 6/7 587 3/4 7/28 690
–5,113
1994 6/7 646 7/28 572 1/2 3,675
1995 6/7 602 1/2 7/28 627
–1,225
1996 6/7 752 1/2 7/30 744 3/4 388
1997 6/6 720 1/2 7/29 675 1/2 2,250
1998 6/5 586 1/2 7/28 572 725
1999 6/7 473 7/28 424 1/4 2,438
2000 6/7 526 3/4 7/28 447 3/4 3,950
2001 6/7 447 1/4 7/30 504
2,838
2002 6/7 484 1/2 7/30 531 1/2 2,350
2003 6/6 602 1/2 7/29 527 1/4 3,763
2004 6/7 718 7/29 590 6,400
2005 6/7 679 3/4 7/28 689
463
2006 6/7 610 1/2 7/28 584 1,325
2007 6/7 847 7/30 831 800
2008 6/6 1446 1/2 7/30 1395 1/2 2,550
2009 6/5 1101 7/28 968 6,650
40-Year Gain $27,725
JUNE SHORT SOYBEANS (SEPTEMBER)
TRADING DAY: 5—HOLD: 36 DAYS
Soybeans Seasonal Pattern since 1968
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 54
MONDAY
23
TUESDAY
24
WEDNESDAY
25
THURSDAY
26
FRIDAY
27
SATURDAY
28
SUNDAY
29
640K ought to be enough for anybody. — William H. Gates (Microsoft founder, 1981)
A government which robs Peter to pay Paul can always depend on the support of Paul.
— George Bernard Shaw (Irish dramatist, 1856–1950)
One only gets to the top rung on the ladder by steadily climbing up one at a time,
and suddenly all sorts of powers, all sorts of abilities, which you thought never
belonged to you—suddenly become within your own possibility .
— Margaret Thatcher (British prime minister 1979–1990, b. 1925)
The possession of gold has ruined fewer men than the lack of it.
Thomas Bailey Aldrich (American author, poet, and editor, 1903, 1836–1907)
If you torture the data long enough, it will confess to anything.
— Darrell Huff (How to Lie With Statistics, 1954)
Start Short Coffee(U)—72.2% Accuracy Since 1974—End Aug. 9—Page 52
End Long Soybeans(N) (Feb. 11)
Start Short British Pound(U)—65.7% Accuracy Since 1975—End Jun. 9—Page 126
MAY
FN:
CL(M)
OE:
NG(M), HG(M), GC(M)
LT:
NG(M), HG(K), SI(K)
FN:
NG(M)
c01_CTA_2011_pgs_12-119_c01_cta_2011_pgs_12-119 7/21/10 2:03 PM Page 55

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