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(March 18, 2002) CORN: May corn prices have continued to move lower making new contract lows early today at 204-1/2 cents. The market continues to remain entrenched in a bear market that has been intact since last summer. Commodity funds appear to be holding short positions and little weather premium appears factored into current prices.

Technically the market is approaching oversold levels. Stochastic levels are now below 20. I believe value can begin to develop as prices near the 2.00 area. With funds short and little weather premium built in, any weather concerns over planting could start short covering in this market.

As I have said before, I am not a big advocate of picking tops or bottoms. However, I believe the risk to reward ratio favors looking at the long side of corn at current prices. It is my belief that traders can consider purchasing inexpensive options, in anticipation of a bottom developing.

RECOMMENDATION--Traders can consider purchases of the July 220 calls. Current values as I write are at 7 cents or $350. Expiration for July corn options is June 22nd.

Boyd Baker

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