April 7, 2000

My recommendation in Cotton was to use the December Futures and sell about 35 percent of your estimated production at 62 cents and about 35 percent at 64 cents. The market traded up to 64.50 and is now at 61.30.

For Corn and Beans, we should be marketing now. The December Corn is $2.58 and the $2.60 Call is 24 cents. November Beans are trading at $5.56 and the $5.75 Call is at 42 cents. I think selling these Calls are good strategies. Example:

(1) December Corn Futures are trading at $2.58

(2) Sell the December Corn $2.60 Call for 24 cents

(3) If Corn stays below $2.60, you net 24 cents

(4) If Corn moves up from $2.58 to $2.75, you get a 17 cents increase in Corn and make 9› profit from the Call

(5) If Corn moves up from $2.58 to $3.00, you get a 42 cents increase in Corn but lose 16 cents in the Call.

If I can help you in any way, give me a call.

Fundamentals: Good rains in Texas Panhandle. May have increased acreage.
Technical Analysis: Trend—Up/Resistance—64.50/Support 59.60

Fundamentals: China selling on U.S. rallies. Weather will be a factor.
Technical Analysis: Trend—Up/Resistance—2.64/Support—2.51

Fundamentals: Live Cattle above 72.00. Boxed beef sales excellent.
Technical Analysis: Trend—Sideways/Resistance—82.20/Support—85.30