SOYBEANS

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GENERAL OVERVIEW OF SOYBEANS MARKET

ISSUE DATE:  MAY 30, 2006

We have made an adjustment to cycles since the last release. We were previously showing soybeans as having broken below LEC. That is not the case and we  see soybeans as being at, or very near a major bottom.

Considering the price action since May 22, we think price is ready to break down through IC2. That will lead to a bottom along the LEC line. At LEC we are likely to see a choppy trading range between LEC and IC1, across to target 3, but soybeans could rise quite suddenly anywhere along LEC.

If soybeans can hold above IC2, price should trade to target 2. The cycle that will dominate over the next few months is IC2 and has its centre line at C3, so price should get to the top of this cycle, or around 730 by early August.

It is possible that soybeans could spike to target 1, but considering the weakness shown over recent days we think a fall is more likely.