wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(November 6, 1997) CORN: The trade during the past week in the corn sector was mostly weak as pressure stemmed from ideas that export sales to Asian countries may not high as earlier anticipated due to the recent financial crisis, along with the news that China still has corn to sell. The news on the street still seems to indicate that China has plenty of corn to offer on the export market as late week stories indicated they could move up to 500,000 metric tons, if need be. The financial uncertainty also continues to keep the market edgy as it will be interesting to see if the USDA makes export adjustments on their upcoming report. Despite export worries, the past week's export sales figures were better as total sales were about 50% over the previous week. The supply side of the market continues to look gloomy as farmers did let go of some more corn on the break, and if prices continue to slide it could spark heavy farmer selling. Overall, market internals are mixed to weak, and if the Asian problems exist for long, it could for the USDA to slice some export estimates from recent reports, but do not look for this to happen overnight with such a strong up bias still in the marketplace. Technically, December corn is in an uptrend; the trend will turn back down on close below $2.78.
FUTURES STRATEGY–Short CZ at $2.85. Maintain a protective buy stop close only at $2.97½.
OPTION STRATEGY–Short CZ $3.00 calls at $.07¢. Maintain a protective buy stop at $.9¢.
Tony Montini
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