COMMODITY RESOURCE CORPORATION
400 South Fourth Street, Minneapolis, Minnesota
(March 26, 1997)

WHEAT:

OUTLOOK

There's a mixed bag here. The winter wheat crop remains in generally good condition, however
there are dry areas (Colorado for example). The next six weeks will be critical to development of the new crop, and April rains are needed. (No reason at this time to believe they won't be received.) There is still uncertainty as to whether the spring crop will be planted in a timely manner due to wet conditions. I also look for some crop switching out of wheat in the Dakotas and Minnesota. Bottom line, it looks to be a two-sided affair, but with a bearish bias for the coming weeks as long as the winter wheat crop is developing normally.

STRATEGY

HEDGERS:

Winter wheat farmers have been advised to hedge up to 50% in the July K.C. at an average price of about 380. Use put options if you are not comfortable with futures. Look to add 25% on the first close under 369 only since this would confirm a change in trend.

TRADERS:

We remain long September Minneapolis futures (new-crop spring wheat) at $3.50 or lower with a `legged on spread,' short July Chicago at about 370. Hold.
George Kleinman

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