COMMODITY RESOURCE CORPORATION

P.O. Box 8700, Incline Village, Nevada

(October 16, 1997) WHEAT: OUTLOOK–The big commodity funds have been aggressively buying corn and soybeans lately, however many of them have actually been selling wheat. The “spreaders” seem to like buying corn and selling wheat as well. Yet, with wheat values now less than 80¢ over corn, wheat cannot be termed expensive. The funds are most likely looking at the improving winter wheat prospects, and the crop does appear to be off to a good start with generous moisture. The export market has not been too exciting, so the “shorts” have not really been caught in any kind of major wheat rally yet. Yet, total global wheat supplies are tight, and I still feel wheat is undervalued when one views supplies in relation to usage. As soon as export demand picks up in the coming months, so should the wheat market!

STRATEGY–HEDGERS: If you have not already done so, we continue to suggest selling all cash wheat and replacing with at the money call options. If you have sold your wheat previously this is sound advice if you wish to maintain ownership, benefit from higher prices to come, while limiting your downside risk. Remember, with options, your risk is limited at most to the cost of the options plus fees. At present this is under 20¢/bushel for March. Your upside remains without limits.

TRADERS: Hold Minneapolis December futures bought in the 352 to 356 range. Our stop is at 380.

George Kleinman

Grain and Oilseeds Index
Soybeans
ALLENDALE, INC. | BRADFORD & CO. INC.
COMMODITY REVIEW AND OUTLOOK | COMMODITY RESOURCE CORPORATION
GLOBAL ASSET MANAGEMENT | ING DERIVATIVES CLEARING | PRUDENTIAL SECURITIES, INC.
TAURUS COMMODITIES | THE WINDY CITY TRADER
Wheat
ALLENDALE, INC. | BRADFORD & CO., INC.
COMMODITY REVIEW AND OUTLOOK | COMMODITY RESOURCE CORPORATION
GLOBAL ASSET MANAGEMENT | ING DERIVATIVES CLEARING | PRUDENTIAL SECURITIES, INC.
Corn
ALLENDALE, INC. | BRADFORD & CO., INC.
COMMODITY REVIEW AND OUTLOOK | COMMODITY RESOURCE CORPORATION
GLOBAL ASSET MANAGEMENT
ING DERIVATIVES CLEARING | IRA EPSTEIN & COMPANY | PRUDENTIAL SECURITIES, INC.
Consensus National Futures and Financial On Line Index

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