THE WINDY CITY TRADER

P.O. Box 1673, Chicago, Illinois

(November 11, 1997) SOYBEANS: Soybeans took it on the chin Monday due to a number of short-term factors. The USDA crop production report was neutral at 2.734 billion bushels, up slightly from last month's 2.722 billion. Since the market rallied over 40¢ last week expecting a bullish number, a neutral number became somewhat bearish. Also, heavy rains have hit southern South America. This is slowing the planting season for corn. The feeling is that since it may be too late to plant corn, farmers could shift some of this acreage for soybeans. In that vein, Argentina is expected to plant 6-10% more beans than last year. One last factor is psychological. Since the gap higher opening from $6.85 last month in March beans, no one has been forced out of this market. While we still are bullish long-term for beans and bean products, it is possible to see a further drop back to $685-$694 short-term basis March. Soymeal reached new contract highs last week on strong exports of 309,000 tons. The weak beans however could also drag this market lower, short-term. Bean oil could see a big profit-taking sell-off. Large speculators are long 38,000 contracts and small speculators hold 21,000 longs. Be careful here. The weakness in corn continues. The USDA forecast for 9.38 billion bushels (up from last months 9.28 billion) didn't help either. The prospects for a big U.S. crop, coupled with news that China sold 70,000 tons last week, has the market on the defensive. There are some positive factors here however. Recent cold, wet weather has slowed harvesting in the U.S. Also, Argentina is projecting to plant 5% less than last year and the stocks-to- usage ratio is at near record levels. We might see another 8- 10¢ downside at which point we could very well be recommending a buy. There is not much to say about wheat. Exports are non- existent and Argentina is said to have a huge crop. Wait for the current dip to run its course, then look to buy beans and corn.

Stephen Connell and William Frejlich

Grain and Oilseeds Index
Soybeans
11/11 THE WINDY CITY TRADER | 11/13 BRADFORD & CO. INC.
11/12 COMMODITY RESOURCE CORPORATION | 11/13 GLOBAL ASSET MANAGEMENT
11/11 IRA EPSTEIN & COMPANY | 11/10 PRUDENTIAL SECURITIES, INC.
11/13 R.J. O'BRIEN & ASSOCIATES, INC. | 11/07 TAURUS COMMODITIES
Wheat
11/10 PRUDENTIAL SECURITIES, INC. | 11/13 BRADFORD & CO., INC.
11/13 R.J. O'BRIEN & ASSOCIATES, INC. | 11/12 COMMODITY RESOURCE CORPORATION
11/13 GLOBAL ASSET MANAGEMENT
Corn
11/11 IRA EPSTEIN & COMPANY | 11/13 BRADFORD & CO., INC.
11/13 R.J. O'BRIEN & ASSOCIATES, INC. | 11/12 COMMODITY RESOURCE CORPORATION
11/13 GLOBAL ASSET MANAGEMENT | 11/10 PRUDENTIAL SECURITIES, INC.
Consensus National Futures and Financial On Line Index

Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com

wmeubank@ocp.kcmo.com