ALLENDALE, INC.
4506 Prime Parkway, McHenry, Illinois
800-262-7538
(March 1, 2002) CORN: Historically our ten-year study of May futures during the month of March suggest six- out of ten-year odds favor the long side of corn which is bought the last day of February and exit at the close of business on the last day of March. The ten-year average rally during the month is 10 cents, while the ten-year average low during the month has been 7 cents. Historicals the past four years have suggested a near-term low begins very close to first notice day for March futures for old- and new-crop corn and then rallies during the first week to two weeks of trade in the month. The combination of this historical news as well as the fact both domestic an world stocks are less than anytime during the past four years suggest a need to be long. We remain long May corn calls and May futures. Our hedge advice recommendations are clearly defined on our <169>Hedge Advice<170> page and a result of our three- and ten-year study which suggest new-crop corn futures have had an average tendency to trade between a 2420 to 2520 trade range during the month of March and through the first three weeks of April. Our July and December corn projections suggest we may have set a bottom and may now be poised to stage a rally to 2500-2600 in December futures and 2350 in the July futures. If you need to raise cash flow for operating expenses you could consider selling cash corn while CIF and interior bases level remain firm, but only if you are willing to re-own the cash inventory you sell with long futures.
Commitments Of Traders Futures And Options
Net Fund Positions Over Corn Prices
Allendale, Inc. © 2002.
China was the biggest story of the week as this week they canceled 81% of all of their previous 885 K tonnes of corn purchased from the USA last fall. Whether due to a WTO votes need ploy on their part or because of GMO March 20th deadline concerns the trade must come to grips with the fact the cancellations account for .02976% of this years use as a percent of the 2001 corn production. As we walk into the first full week of trade for the month of March the trade will focus on debate regarding the March 20th China GMO deadline, speculation of increased corn acres to be planted this spring and the U.S. drought monitor which shows reason for plenty of concern and lets not forget the Farm Bill debate. Make sure you continue to use as a tool to find longer-term support and resistance values.
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