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COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(September 24, 1997) WHEAT: Egyptian buying provided minor support to the wheat market. The rain in Australia remains bearish near term. With little news, the market may tend to follow corn and beans lower.
RESISTANCE–Resistance basis December lies near 368, 372-374, 376, 380-384, 389-390, 395, 398 and 402-404 and 413.
SUPPORT–Support basis December remains near 363 and 355 or so.
RECOMMENDATION–December wheat is taking on a more negative tone. Aggressive traders might sell December wheat in the mid-upper 360's with stops over 376. Look for a decline to the mid 350's. 366 remains a pivot point for the market. Long-term bulls could consider holding on, but I would suggest selling calls to reduce risk. I suspect that this will eventually be a substantial long term bull, but the here and now appears negative. Option traders should buy March or May calls on weakness for the long pull. Objective is open, but a move to 410-420 basis December is very much in the cards.
M. Steven Morgan
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