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THE WINDY CITY TRADER
P.O. Box 1673, Chicago, Illinois
(December 16, 1997) CORN: Grains continue to sell off due to a number of factors. From a technical standpoint, most have broken through key support areas. Also, most seasonal tendencies call for grains to drop at this time of the year as well. Cargill, Inc., a large grain company was a huge seller of corn in the cash markets last week. There were rumors of cancellations of large corn orders from Asia, particularly South Korea. The selling by Cargill would seem to confirm this. The soybeans news was mixed. There was a record crush of beans into meal and oil in October due to strong demand. Some negative news has crept into the picture however. The weather has improved dramatically in South America and planting is nearly 90% complete. With continued good weather, South America predicts a record soybean harvest. Also India has raised their crush intentions from 5 million to 5.3 million tons. Since their meal is sold for about $20 a ton cheaper than the U.S., the competition could hurt. Since exiting our bean call options some time ago, we've been on the sidelines. Let's stay there for a while. Worldwide wheat production has increased to a record of 605 million tons. This is up almost 30 million tons in the last 5 months. With exports at a virtual standstill, record crops forecast, and a weak bean and corn complex, wheat could blow off all the way to $3.00 before finding support.
Stephen Connell and William Frejlich
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