wmeubank@ocp.kcmo.com
(May 8, 1997) WHEAT: Wheat futures spent the past week in a volatile to weak state as it seems the market has turned its focus back to the weak export status. The recent uproar from the freeze in the hard red winter wheat belt has subsided as damage does not appear to be anywhere near the projection of 150 million bushels. The market also seemed to lose interest in possible problems with planting spring wheat as most of the areas that are having flood problems are not near any major wheat growing areas. The Wheat Quality Council hard red winter wheat tour was mixed, but overall ideas are that the freeze did not harm the crop that bad and a good timely rain will really help the crop. Overall, market internals appear to be heading into a dull state. With all of the favorable news that has entered the marketplace activity remains pretty soft and with a lack of demand price action should maintain the recent weak status. July wheat is in an uptrend; the trend would turn down on a close $4.14; a close below $4.14 would give the market a downside target to the $3.69 level as long as close below the trendline are maintained.
FUTURES STRATEGY--Short WN at $4.28<$E1/2>. Maintain a protective buy stop close only at $4.37.
OPTION STRATEGY--Short WN $5.00 call at $.08. Maintain protective buy stop at $.19.
Tony Montini
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