wmeubank@ocp.kcmo.com
THE WINDY CITY TRADER
P.O. Box 1673, Chicago, Illinois
(December 2, 1997) SOYBEANS: Soybeans continue to fight a two sided battle. On one side, we continue to see good export figures. Last week we exported over 225,000 tons of soymeal to various destinations. The trade was expecting a figure of 75,000 tons to be exported. On the other side, South America is forecasting a record soybean crop this year, based on planting intentions. The weather situation has improved dramatically and to date the El Nino fears have not materialized. January beans will need to continue to close above $7.17. A close below there could send prices to $7.00 and possibly to $6.80 before stabilizing. We would still wait for another test of 25.25 before considering a buy in March bean oil. Corn is experiencing some of the same problems as beans. The corn situation however is in reverse of beans. Overall world demand is still strong. Last week's export numbers were disappointing. The trade expected exports of 1,000,000 tons. The actual exports came in at 415,000 tons sent. This is pressuring the market short term. Part of the reason for lower exports continues to be the Asian currency and stocks situation. These countries are fearful to make any long-term commitment right now. On the plus side, South America has forecast a 6% reduction in their corn crop so an improved Asia situation would be very bullish. March corn needs a close above $2.84 to strengthen this market. A close below $2.78 could push prices to $2.71. All news for wheat, of late, has been bearish. While the market is oversold technically, Australia, the U.S. and China have all seen perfect weather conditions to date. Demand must pick up soon.
Stephen Connell and William Frejlich
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