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COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 5, Orleans, Massachusetts
(October 2, 1997) WHEAT: SHORT TERM–Forecasts for additional rainfall in Australia and more aggressive fund selling sent the wheat through near-term support levels. Exports have been disappointing. U.S. growing weather has been excellent. In addition, carryover harvest selling in corn and the bean complex continues to weigh on the market. Meal, corn and wheat are all tied to each other as relative substitutes for feed, so with two of the three showing pronounced weakness, wheat may need to see corn put in a low before it turns around.
RESISTANCE–Resistance basis December lies near 363 368, 372-374, 376, 380-384, 389-390, 395,
SUPPORT–Support basis December remains near 350, 345, 342, 335.
RECOMMENDATION–Weakness may remain until after the harvest. Until then, a two-sided approach may be the best way to trade the market. Aggressive traders might consider buying Dec. wheat in the 350-355 area with stops under 345 or of 10 or so cents, and/or sell a rally to the mid-upper 360's with stops over 378 or of 5-10 cents. Option traders should buy March or May calls for the long pull. Objective is open.
M. Steven Morgan
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