wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(November 6, 1997) WHEAT: SHORT TERM–Wheat remains a follower of corn and beans. Australia's crops are in pretty good shape due to timely rains, but there is still talk that China's wheat crop is in trouble due to dry weather. Exports have been lackluster. If El Nino becomes a real problem rather than potential, wheat could have plenty of upside. However, current slow demand and ample supplies suggest the potential for problems on rallies.
RESISTANCE–Resistance basis December lies near 360, 363 368, 372-374, 376, 380-384, 389- 390.
SUPPORT–Support basis December remains near 355, 350, 348, 342, 335.
RECOMMENDATION–Recent action raises suspicion in my mind as to the 355 support area holding. The action has been a bit more negative than I would have expected, so if you're a bear, sell near 360 with 5-10 cent stops or over 364½. Look for a break to near 350, possibly into the 340's. Option traders should buy March or May calls for the long pull on a decline to the 350-360 area basis March. Objective is open.
M. Steven Morgan
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