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800-262-7538(March 24, 2000) CORN: Hey it's only March! You can now officially be welcomed to the "too season." If you have read us over the past 10 years it is our way of explaining how touchy this market can be when farmers will tell you it is "too cold, too wet, too hot or too dry" to plant the crop. Most all of the fundamental attention is focused on the weather. Subsoils need repair and any extended length of time which has dry weather will likely have futures trading high. We have our hedges protected with bull call spreads as well as our old-crop marketing. Provided the time of the year it is not too late to apply the same bull call spreads to protect against any surprises. You bet we are going to take a stab at buying the July corn. Fundamentally the floor trade is still a touch nervous about the prospects for a long period of dry weather. Basis levels are healing very well since the futures have fallen back. Nothing is moving in the cash grain markets and basis will need to respond better for the basis traders to get excited about moving grain. If they are un willing sellers then futures will need to push higher in order for old crop to move. Remember if your local elevator says "free DP" you say "Sold" as you are taking advantage of the same great basis levels the elevator is trying to fill sales on. Take the sale and then re-own via the use of a September 240-290 bull call spread. Check to see if you can buy something in the December for about the same coverage per month/bushel. Support in the July is 2360 which is trendline support. Buy there and use an objective of the chart gap overhead at the 2460 area. Risk and reverse to a short if the 2326 week of 3/6/00 lows are taken out. Support in the weekly charts is light at 2332 with solid support at the consolidation area of 2204. Overhead resistance is at 2554.
Joe Victor
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