wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste 2607, Chicago, Illinois
(October 9, 1997) CORN: The trade during the past week in the corn sector was very strong as the market posted sharp gains on worries that old-crop supplies could tighten even further due to a lack of farmer selling of the newly harvested corn crop. Gains were also sparked by news that China had stopped corn exports in an effort to try and reduce domestic prices which have rallied during the last month or so. Late week news from China had the government stating that they were not aware of such action and some export sources indicate corn is still moving on only previously contracted sales. Overall, the rally during the last week probably has priced in any bullish surprise for the upcoming USDA crop production release and farmer selling could become active if the market starts to soften after the release of the figures. From an export standpoint sales have been decent, but nothing out of the ordinary which is probably a signal that the current price levels may be a bit high, especially if farmer selling starts to increase after the report release. Technically, December corn is in a uptrend, the trend will turn back down on a close below $2.75.
FUTURES STRATEGY–Sell CZ at $2.75 stop. If filled enter a protective buy stop close only at $2.88½.
OPTION STRATEGY–Short CZ $3.00 calls at $.07. Maintain a protective buy stop at $.19.
Tony Montini
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