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Year-end soybean market meltdown

Agriculture.com Staff 12/31/2007 @ 5:57am

On Friday, December 28, at 1:14 PM CST, one minute before the close of trade on the Chicago Board of Trade, a huge sell order (rumored to be 5,000 or 10,000 contracts) was sold -- in thin holiday trade. This huge sale at that time of day dropped soybean prices by 47 cents in per bushel in less than 60 seconds.

As of Sunday, December 30, all grain companies are out of the market -- with no bids posted for corn and soybean sales (READ MORE). This has panicked farmers who need or want to sell grain right at the end of the year.

Do not panic. Do not sell with elevators taking price protection. Do not sell right after the opening if prices start out sharply lower on Monday or Wednesday. Do not forget the markets close at noon on Monday and are closed for the New Years Holiday on Tuesday.

By January 4 or 5, the odds are very good that, with continued dry weather in Argentina, prices will rebound to the highs made on Friday December 28.

If you are making year-end grain sales and are forced to delay the sale until 2008 because of the current market conditions, do not panic. You can still claim the income in 2007 -- you can take the income in 2007 on 2008 grain sales. In contrast, the IRS regulations do not let you sell grain in 2007 and then delay reporting the income until 2008.

On Friday, December 28, at 1:14 PM CST, one minute before the close of trade on the Chicago Board of Trade, a huge sell order (rumored to be 5,000 or 10,000 contracts) was sold -- in thin holiday trade. This huge sale at that time of day dropped soybean prices by 47 cents in per bushel in less than 60 seconds.

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