wmeubank@ocp.kcmo.com
IRA EPSTEIN & COMPANY
626 West Jackson, Chicago, Illinois
(November 11, 1997) CORN: Corn futures continue to correct after the sharp price advances recorded during the first week of October. For the past month, weekly export reports have indicated a weaker trend in demand, indicating to me, that corn prices may be over inflated for the moment.
The latest Supply/Demand report released this past Monday, November 10, confirmed the notion of weaker demand. I believe a downward revision in U.S. exports proved too much for speculators to swallow. Long liquidation provided the bulk of selling.
Nevertheless, I remain a longer-term corn bull. In summary, U.S. corn stocks and world grain stocks remain fairly tight historically. Therefore, I believe near-term demand concerns will eventually give way to long-term supply consideration.
Furthermore, I believe end-users remain uncovered and will increasingly utilize price weakness in the short run to purchase corn futures for protection against further price advances. In my opinion, commercial buy programs will become increasingly aggressive as corn futures decline near 2.75 basis the March contract.
Technically, I believe the March corn futures are in the beginning stages of a strong up trend with support near 2.75.
Additionally, I believe the stochastics are beginning to indicate oversold conditions as corn futures return to trend support.
In my opinion, oversold stochastics in a bull trend may be utilized in conjunction with other indicators as a buy signal. Therefore, traders may wish to position long the March corn futures if or when they return to trend support.
Mike Peifer
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com