wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(October 29, 1997) WHEAT: SHORT TERM–Fund liquidation, poor exports and fears of reduced Asian business are keeping a lid on the wheat market. The chance of the Chinese purchasing 700,000 tonnes of U.S. wheat appears very doubtful due to their concerns about quality, especially TCK smut, a fungal disease. It's unlikely that this thorny issue will be resolved on their visit. Supplies are seen as ample, exports dismal. This could mean another round of liquidation.
RESISTANCE–Resistance basis December lies near 363 368, 372-374, 376, 380-384, 389-390.
SUPPORT–Support basis December remains near 360, 355, 350, 348, 342, 335.
RECOMMENDATION–Short-term traders should stay with the range approach, but a slight downside bias may be warranted for now. Aggressive traders might consider buying December wheat in the mid-upper 350's with stops under 348 or of 10 or so cents, and/or sell the upper 360's, low 370's with stops over 380 or 384 or of. 5-.10¢. Option traders should buy March or May calls for the long pull on a decline to the 350-360 area basis March Objective is open.
M. Steven Morgan
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