COMMODITY REVIEW AND OUTLOOK

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(November 21, 1997) WHEAT: SHORT TERM–Slow exports and Asian concerns, combined with commercial selling and ample supplies of wheat remain the primary feature for wheat. Argentina, Australia and Canada all remain aggressive competitors. However, Australia and South Africa could both have problems with El Nino, and China reportedly has had problems with their wheat crop. Without some sort of trigger, plentiful world supplies of wheat may keep a lid on rallies. If El Nino becomes a real problem rather than potential, wheat could have plenty of upside.

RESISTANCE–Resistance basis Mar. lies near 360, 365, 370, 373, 380, 385, 391.

SUPPORT–Support basis Mar. remains near 352, 344, 330, 323.

RECOMMENDATION–Most traders should sell Mar. wheat in the low 360's with stops over 365 or 370 or of 5-10 cents. Look for a decline to new lows, possibly to the mid 330's. If exports don't improve or if there are no crop problems of note, a move to 310-320 can't be counted out. If you are a long-term bullish option trader, consider buying Mar. or May calls for the long pull on current weakness. Objective is open.

M. Steven Morgan

Consensus National Futures and Financial On Line Index

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