This article is brought to you by:
CONSENSUS

TIGER ON SPREADS
P.O. Box 64401, Chicago, Illinois
800-368-5958

(March 4, 2002) CORN: Trade has been muted on the Chicago Board of Trade. Supply/demand remains in equilibrium. Seasonal lows are often generated in the current time frame but there is little to sustain a subsequent up move even if a low is made.

Corn is quiet and more weak than strong. There continues to be more bullish hope than fact. Witness the continuing talk of the return of El Nino and potential accompanying weather disruptions. This could also potentially affect new-crop beans--if anything happens at all. For now, all crops look bigger with the exception of wheat where the problem is one of a lack of demand in spite of reduced supplies.

The spreads are still static with carrying charges limiting any widening but with not enough positive news to generate any tightening. Hold the one unit of long old-crop July/short new-crop December corn from 12 cents December premium. Activity should pick up after mid March.

Wheat/corn spreads have slipped a bit on wheat weakness. Wheat has been suffering from a lack of demand while corn has been suffering from too much supply. Longer term, the long December wheat/short corn spread could provide a opportunity if it can first decline to below 60 cents wheat premium. Keep an eye on this one.

 

Phil Tiger

Hosted by:
CONSENSUS, INC. AND INVESTORS CO-OP
P.O. Box 520526
Independence, MO 64052-0526
816-373-3700
Fax: 816-373-3701
editor@consensus-inc.com