wmeubank@ocp.kcmo.com
ALLENDALE, INC.
4506 Prime Parkway, McHenry, Virginia
(December 5, 1997) WHEAT: We have been preaching for about a week that the wheat market is finally cheap enough. With prices about 1.00/bu below the cost of production, there is good value. The only remaining bearish factor at this time is the train backup. There are as much as .750 to 1.2 billion bushels of feed grains backed up. Many of which are on the ground and taking damage. Traders thought this was bullish but we all know that if you can't sell it, you'll smell it and it will then be forced on the market which is always bearish. Longer term, however it is bullish as it forces prices down to levels that attract demand. We expect the market is putting in a bottom and it will take some time for this low to develop. Until then, for the near term you can trade both sides.
Bill Biedermann
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