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(March 21, 2002) CORN: Although corn prices have remained fairly stable at current levels, trends have remained lower since turning down last September. Basically, each time the market rallies, it fails to make a new high and each time prices decline, they generally do make new lows. This "stair-stepping" action down has done little to encourage buyers to come into the market. From a historical basis, there is "value" around these levels, but weather will be the ultimate factor which could push prices back higher. If the new Farm Bill is little changed from last year, then odds favor another year of "over" production. Analysts are already predicting that planted corn acres will increase almost 3 million acres over last year. It is probably too early to make this type of assumption, but the market has had to deal with these estimates. Estimated planted acre reports will be out later this month which may generate some volatility. Short-term and long-term trends are still pointing lower. A close above $2.13 basis the May contract would turn short-term trends higher. Long-term trend indicators are holding at "oversold" levels, but again, a weekly close above $2.13 would turn chart back positive. The seasonal tendency is still for higher prices into late spring, but there is still little evidence that prices are going to make a move anytime soon. It may be unfortunate that weather will play such an important role this year. In the past, changing supply/demand factors usually gave the market a fluctuating range year round. The fact that ending stocks continue to grow has done little to provide producers with any opportunity to lock in prices at profitable levels.

SHORT-TERM TREND--Trends are lower.

LONG-TERM TREND--Up into April/May.

 

Bryon Fillpot

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