wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(October 23, 1997) CORN: The trade during the past week in the corn sector was very volatile, as the market did post some gains, but could not push through recent highs. Support continued to stem from a lack of farmer selling of the newly harvested corn crop. Despite all of the fanfare, the commercials were heavy sellers near the highs, which is probably a good sign that farmers are marketing some grain, but movement is still slow. Harvest activity has remained at a decent pace despite some rain delays. News from the field does indicate corn yields are better than previously estimated in most areas. Overall, the recent rally probably has priced in any bullish surprise from the export side, but a lack of farmer selling could keep prices firm for the time being. From an export standpoint, sales have been decent, but nothing our of outstanding, which is also an indicator that the current price levels may be a bit high. Export sales could also weaken if Asian stock markets continue to fall. Technically, December corn is in an uptrend; the trend will turn back on a close below $2.78.
FUTURES STRATEGY–Sell CZ at $2.85 stop. If filled, enter a protective buy stop close only at $2.97½.
OPTION STRATEGY–Short CZ $3.00 calls at $.07. Maintain a protective buy stop at $.19.
Tony Montini
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