wmeubank@ocp.kcmo.com
ALLENDALE, INC.
4506 Prime Parkway, McHenry, Illinois
(December 12, 1997) CORN: USDA lowered the exports 50 mil. bu. and raised domestic use 25 mil. bu. The net change to the ending stocks was a 25 mil. bu. increase. This was in line with expectations. Weekly export sales suggest USDA might still be too high on their export projection. USDA is also working on a sizable GSM package to South Korea. Normally, South Korea buys 8.7 mmt of corn so losing their business is a big blow to U.S. ag. But as Joe pointed out, if South Korea buys from the U.S. and cancels from China, then will that eliminate China as a potential importer of U.S. corn? Additionally, South Korea is typically not a GSM user. They prefer to pay cash rather than go into debt (smart people). But because of the downward spiral of industrial commodity prices, they may be in a position where they have to barrow from the U.S. unless the downward spiral in Asian currency keeps them advantageous to buy form other non-U.S. related currency suppliers. We remain short however, our long awaited objectives were hit this week! Therefore we are no longer bearish as we are at economic value. Now we need to let the market tell us when to turn bullish.
ATTENTION–Aldl rolled from March to May corn: 100% hedged at 306!
Bill Biedermann
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