wmeubank@ocp.kcmo.com
R.J. O'BRIEN & ASSOCIATES, INC.
555 W. Jackson Blvd., Chicago, Illinois
(December 5, 1997) CORN: Our last two objectives in the December corn have been met, the first one at $2.75 December and the second at $2.67-$2.70. The problem is what to do next. If we felt that December corn was worth “only” $2.70, what of March at $2.80? Looking down the road, will demand be any better? Depends. Export Sales report giving no juice to the market. Sales of 710,000 mt on the last report were nice, but nothing to get excited about. Argentine corn planting conditions are favorable and South Africa seems to be improving in spots. Eastern Europe joins up with China for corn sales and forces us to go lower to keep up. The next Supply/Demand report may not yet make any downward changes to the export numbers but the trend for the carryover is up and towards the billion bushel mark. Therefore, near term at least, we'd have go suggest that rallies in the March corn to $2.85-$2.90 will be sell areas with risk of a SCO over $3.00. Curiously, the same prices we used in the December contract. Downside? Without a sizable increase in exports; without a weather problem somewhere; without a new, major push up in meal prices; we could see the March back to the late September/early October lows at $2.65.
John W. Kleist
Commodity Consultant
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