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THE WINDY CITY TRADER
P.O. Box 1673, Chicago, Illinois
(August 19, 1997) CORN: The grains are choppy. The long-term weather pattern (dryness) finally broke as did the corn and bean prices. November beans rallied almost 70 cents and have dropped back about 60 cents. December corn rallied 50 cents, (from lows) dropped almost 30 cents and were looking bleak. However, the August 12, USDA Crop Production report changed the picture somewhat. Corn yield expectation was reduced from 10.2 billion bushels to 9.265 billion bushels while beans were increased from 2.65 to 2.72 billions bushels. We mentioned sometime back that this scenario might occur. Farmers, upon watching beans near $8.00 at planting time last spring, shifted a good chunk of acreage from corn to beans to take advantage of higher prices. Our feeling is that beans will be quite volatile and might still have 25-50 cents downside left while corn should be within 10-15 cents of its lows. This is assuming a normal harvest in September and October. Remember that we've seen a frost by September 15th during both 1995 and 1996. December corn futures or options are looking very enticing. December wheat also looks impressive. Canada and Australia have experienced poor growing conditions. Add that to an improving export picture and this could be a sleeper market to watch. December bean oil is forming a strong base between 2200 and 2300. Let's watch this one closely.
Stephen Connell and William Frejlich
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