wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
375 W. Madison, Ste. 2607, Chicago, Illinois
(November 20, 1997) CORN: The trade during the past week in the corn sector was again weak with pressure stemming from more ideas that the USDA will increase carryover stocks on future reports. The reasoning stems from a good suspicion that U.S. export will not be near earlier expectations for the current marketing year. The news on the street still seems to indicate that China has more corn to export and with the fact that it is cheaper than any other source and in Asia it would be very easy for nearby countries to purchase. Overall, market internals have remained weak as the speculation of further USDA increases in carryover continues to keep a cap on the market's attempt to stage a strong rally. The weekly export sales figures from the past week were very strong, but even net sales of over 1.0 million metric tons was not enough to keep the market from breaking. The final factor of doom from price activity is the fact that U.S. farmers are just about to finish reaping the third largest corn crop record. Technically, March corn is in a downtrend; the trend will turn up on a close over $2.85¾.
FUTURES STRATEGY–Short CZ at $2.85. Maintain a protective buy stop close only at $2.97½ and also enter a target of $2.65. Sell CH at $2.84½. If filled enter a protective buy stop close only at $2.95½.
OPTION STRATEGY–Short CZ $3.00 calls at $.07. Maintain a protective buy sop at $.19.
Tony Montini
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