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THE ALLENDALE ADVISORY REPORT
Prepared by Allendale, Inc.
Commodity Wrap-Up For November 21, 1997
Potential bottom forming in wheat, corn jumps off support, stick a fork in the beans. Eastern Europe became an export competitor this week by selling 100k corn to Malaysia and 52k corn to South Korea. Despite this bearish news, U.S. exports were very strong and could help the struggling corn sales to catch up with USDA's yearly projection. This demand provided support for corn right above a long-term up trend. Wheat fell towards five year lows which encouraged commercial buying. Beans remain well above USDA projected prices. Combined with the improved South American weather picture, gave reason for beans to sell off. For the week, December corn rallied 3.5 cents, January beans fell 16.0 cents and December wheat rallied 3.25 cents.
Next Week's Odds
Based on a 30-year study of dates, corn trades 3.5 cents higher 47% of the time, and 3 cents lower 53% of the time next week. Beans trade 11.5 cents higher 36% of the time, and 5.25 cents lower 64% of the time. Wheat trades 4.25 cents higher 47% of the time and 6.25 cents lower 53% of the time. Thus if you are bullish wheat, you have slightly greater than 50% chance of getting it bought lower next week. Whereas in beans, the odds are it will rally more than it will sell off, but the odds of the sell off are better. Thus if you want to buy, you should give it a chance to sell off first.
November 21, 1997Allendale, Inc.
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