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THE ALLENDALE ADVISORY REPORT
Prepared by Allendale, Inc.
Commodity Wrap-Up For June 27, 1997
Wrap Up
This week traders pounded the grains as the public liquidated into first notice day and Monday's report. Reports of Cont'l bringing in barges for delivery added to the pressure and ideal weather made it hard for any grain to rally. Retail and fund selling was noted all week while the commercials were the buyer of beans and wheat, a seller of corn. For the week, December corn closed down 9 cents, November beans down 7 and December wheat down 5.
Delivery Estimates
The CBOT floor traders are guessing bean deliveries to be zero to 1 million bushel, up to 5000 lots of bean oil, zero soymeal, 2 million wheat, corn from zero to a half million bushels, and 1 to 2 million bushels of oats.
Spreads
September/December corn is near oversold and has support at even money and resistance at a nickel inverse. Long term if the crop is healthy look for this spread to build into a carry market. If corn gets zapped by adverse weather then this spread should pop to a bigger inverse then it is presently trading. A chart gap in the September/November bean spread at 51 to 53 needs to be filled. However the trend is lower and has room to move from its present inverse of 265 cents to 15 cents. Once again if the weather remains good the spread should continue to fold in. If weather indicates a slow start to the new-crop harvest look for the spread to widen or gain strength. The September bean corn spread is resting on crucial support of 4.35. However it is in a downtrend. A chart gap at 4.24 needs to be filled. Call for other spread ideas. The September/November bean spread remains in a down trend. It has support at 20 cents inverse and resistance at 41 cents which would turn momentum back to bullishness. It appears the wheat corn spread has found a bottom at 91 cents. Next stop should be higher at 1.15. Presently it is technically near neutral.
June 27, 1997Allendale, Inc.
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