Croker-Rhyne Co., Inc.

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Sept. 28, 2005
Sell December Soybean Oil
I think Soybean Oil is about to roll off a cliff. On the chart below, you will note it has been around the 22 cent level over and over and over during the past seven months. I believe the move up to the 26 cent area was something of a "fake out break out" and, having returned to the 22 cent area, the last thing it is going to do is hang around here for long at all. My guess is a crack through 22 cents is imminent and a rapid move will then take place down to new contract lows (at least). If it doesn't break, I think it will easily make a run back up through 24 cents. This is, to me, the "perfect 2 and 1" in that I firmly believe "it won't stay here" and most likely will make a solid move in one direction or the other.
I am buying "units" of two 22.00 puts with one 22.50 call as insurance with a total cost of about $1230. If I am right, I believe this position has a solid shot at roughly a triple. If I am wrong, I also believe there is a strong possibility of recouping 100% of your investment. Obviously, if Soybean Oil just sits here for the next two months, you could lose money on both sides of the trade.
Give me a call if you are interested.
Bill Rhyne


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