Hog prices fell to 8 cents/lb in December of 1998, the lowest price since 1948. Chicago wheat futures fell to $2.34/bu last September, the lowest since September 1977. The Commodity Research Bureau (CRB) index, the overall index of commodities, dropped to 184 in early February of 1999, the lowest level since March 1975, when the CRB bottomed at 175.1.

Soybean prices also fell lower into February, taking out the 1987 low at $4.79. The next major support is at $4.67, the September 1986 low. If that level is taken out, the next key support is the March 1975 low at $4.39. Look for a major 24-year low to come during March or September to November of 1999.

What has caused prices of soybeans and other commodities to fall so low?

The hard drop can't be blamed on any one factor. First is the financial and currency crisis in Southeast Asia, which greatly reduced demand by one of our key export markets. The reduction in demand occurred at the same time good crops increased grain and oilseed production in both the Northern and Southern Hemispheres. The net result was growing global carryout stocks of soybeans. The table (see printed article) shows the most recent global supply-demand report and the projections for a continued increase in global ending stocks into the 1999-2000 marketing year.

When will commodity and soybean prices turn higher?

Chartists who study time cycles are watching three key periods this year: mid- to late March, late August to early September, and the October-to-November harvest period.

What will signal that prices have bottomed?

The first fundamental signal to watch for will be a monthly supply-demand report that shows a projected reduction in global ending stocks of soybeans. Even if the reduction is small, news that ending stocks have stopped growing and started dropping will be a positive fundamental indicator.

Second will be a chart signal showing a month reversal in soybean prices. Watch for a month when soybean prices take out the previous month's low and then close higher at the end of that month. That signal is a hook reversal higher and could signal a seasonal and possible 24-year low in soybean prices.

What should you do? Stick with a seasonal selling strategy for old-crop soybeans. Sell 25-35% of your cash soybeans each month for the next three to four months. For new-crop soybeans, check on your new-crop bid vs. your local loan price. Make sure you're selling at a price equal to your county loan price plus 20-30 cents/bu. For most producers, that would be $5.70-$5.90 November Chicago Board of Trade soybean futures.

If this price is not hit, be prepared to carry soybeans into the spring and summer of the year 2000. Once this seasonal and 24-year cycle low is in, the long-term trend is for higher prices.