wmeubank@ocp.kcmo.com
R.J. O'BRIEN & ASSOCIATES, INC.
555 W. Jackson Blvd., Chicago, Illinois, 60601
(November 13,1997) CORN: NO RATIONING NEEDED–The recent USDA crop production report and supply/demand tables underscored our concern over the pace of exports and perhaps the market was too co-dependent on the sharp rally in the bean complex. Seems it was. While corn production was slightly higher on the report, the problem was the export number , down 100 mln. bu. If the USDA believed that the China business was “temporary” (the logic of many is that the China selling of corn is merely part of a grand plan to buy it back later at higher prices of course), they didn't seem to put it in the equation. The carryout was back near the 1 bln. bu. mark, and feed use was unchanged. We agree with the feed numbers especially after they were raised in October. But very likely they plateaued. The report confirmed our opinion that December corn at $3.00, or for that matter $2.90, wasn't justified. Since we have hit our stated objective at $2.75, we exited short positions. We'll now let it soak awhile, though we fear $2.70-2.67 may be the next stop. We need some extra demand.
John W. Kleist
Commodity Consultant
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