wmeubank@ocp.kcmo.com
COMMODITY INSIGHT
152 Ennis Lake Road, Ennis, Montana
(September 28, 1997) WHEAT: It was another negative week for grain prices with corn, wheat and oats falling to levels last seen in late July to early August. Soybeans fared slightly better but here too, prices are hovering at their lowest levels in weeks. All in all, this past week in the grain complex was once again dominated by the bears.
It should be mentioned, however, that in the case of wheat, the selling by the infamous commodity funds was offset by quality commercial buying. In the last three days of trading in wheat for instance, the world's largest and most influential commercial purchased in excess of 10 million bushels.
Obviously, there was not enough purchased to offset the fund selling. But late this week, the commercial buying in wheat was the most aggressive that I have been able to detect in that market since prices bottomed in early July. Hopefully, that's a sign wheat prices and grains in general are poised to move higher in the coming weeks.
The USDA will release another Stocks and Production report before Monday's open. This past week, rumors were rampant that the government would show a increase in corn, wheat and soybean production from a month ago. My sources, however, continue to believe that a reduction in corn production is possible as well as one for soybeans. In the case of corn, another reduction in production or stocks will be a bullish surprise.
For now, buy (1) July corn–sell (1) December 1998 corn at the market. Also, buy (1) December wheat at $3.51½.
Jerry F. Welch
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