Futures Analysis & Forecasting HightowerReport.com Strategies for the March 31st USDA Prospective Plantings Report Large Grain Supply May Not Be Enough! Several years ago, the amount of food consumed inside the home was surpassed by what was consumed outside of the home. With a growing middle class around the world and in particular in India and China, we suspect that in addition to the amount of consumption outside of homes rising, the food will have to travel further and be processed in growing layers of distribution. As can be seen in the graphic, the amount of spoilage, waste and lost food is significant, and that should raise the amount of foodstuffs needed from global production. It is well documented that a shift from rural areas to urban areas can have the impact of doubling energy needs, and appears that same rule applies to food consumption. While actively traded grain prices are weak and many have fallen close to their cost of production, other food items like chickpeas, Asian vegetables, Vietnamese rice, South African maize, and Australian avocados have seen significant price gains because of real and perceived influences from El Niño. For a long time, we have maintained that the world needs nearly-perfect grain production to meet its needs, and the way food is consumed is raising that bar! It should also be noted that trend-following funds already hold a massive net short position in excess of 4, contracts in grains well before planted area is now and therefore the markets have been already priced in bearish fears, and the downside may be very limited. With crude oil making noted recovery gains, copper prices at their highest level since mid-november, sugar prices at a one-year high, palm oil reaching a 24 month high and soybean oil prices reaching up to the highest level in one-year, there are a number of markets signalling an end to the spiralling deflationary mantra! For a FREE TRIAL of Daily Research and Trade Recommendations go to HightowerReport.com Global quantitative food losses and waste for each commodity group per year: CEREALS In industrialized countries, consumers throw away 286 million tonnes of cereal products. DAIRY PRODUCTS In Europe alone, 29 million tonnes of dairy products are lost or wasted every year. FISH AND SEAFOOD 8% of fish caught globally is thrown back into the sea. In most cases they are dead, dying or badly damaged. FRUITS AND VEGETABLES Almost half of all the fruits and vegetables produced are wasted. MEAT Of the 263 million tonnes of meat produced globally, over 2% is lost or wasted. OILSEEDS AND PULSES Every year, 22% of the global production of oilseeds and pulses is lost or wasted. ROOTS AND TUBERS In North America & Oceania alone, 5 814 tonnes of roots and tubers are wasted at the consumption stage alone. Source: FAO www.hightowerreport.com Trade Recommendations Pre-open and Midday Audio Updates Fundamental & Technial Chart Library Daily Fundametal & Technical Analysis Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 1
SOYBEANS With world soybean beginning stocks for the 216/17 season at a record high and US beginning stocks at a 9-year high, it may take a significant weather scare for the soybean market bulls to get much traction this spring. The March 31st USDA Prospective Plantings and Quarterly Grain Stocks reports will provide a more accurate indicator of potential supply burdens for the coming year, especially if the weather for this growing season ends up being close to normal. Until the weather becomes a more significant factor later this spring, the market s focus will be on the intended planted area for the new crop season. 135 13 125 12 115 11 15 1 95 9 85 8 75 Jul-97 Jul-97 July 1998 Soybeans vs. Beanoil vs. Soymeal Index July 1997 = 1 Aug-97 Soybeans Soymeal Beanoil Sep-97 Sep-97 Oct-97 Nov-97 Nov-97 Dec-97 Jan-98 Jan-98 Feb-98 Mar-98 Mar-98 Apr-98 May-98 Jun-98 Jun-98 Jul-98 Preliminary Plantings Estimates may be Too High Each year at their annual Outlook Conference in late February, the USDA offers a preliminary forecast of planted area for the upcoming growing season. Over the past 15 years, the March 31st Prospective Plantings number (based on a survey of planting intentions of US farmers) has varied from 5.34% above to 5.44% below the Outlook Conference estimate. At the Outlook Conference this year, the USDA forecast soybean planted area at 82.5 million acres. The data in the table suggests that the Prospective Plantings number is likely to fall within the 78. to 86.9 million acre range and most likely in the 8.85 to 84.15 million range. We see planted acreage near 83.6 million acres. There has been an above-average amount of prevent-plant acreage over the past few years (This is acreage that was unable to be planted in time due to poor conditions such as flooding, and which farmers were prevented from planting at a later date if Soybean Planted Area: USDA Outlook Conference Vs. March 31st Prospective Plantings Year Outlook Conference March 31st Prospective Plantings Change % Change (Million Acres) 21 74,5 76,657 2,157 2.9% 22 74,5 72,966-1,534-2.6% 23 72,2 73,182 982 1.36% 24 74,5 75,411 911 1.22% 25 73, 73,91 91 1.25% 26 73,5 76,895 3,395 4.62% 27 71, 67,14-3,86-5.44% 28 71, 74,793 3,793 5.34% 74, 76,24 2,24 2.74% 76,5 78,98 1,598 2.9% 78, 76,69-1,31-1.68% 75, 73,92-1,98-1.46% 213 76, 77,126 1,126 1.48% 79,5 81,493 1,993 2.51% 215 83,5 84,635 1,135 1.36% 216 82,5 Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 2
they wanted to collect insurance on that lost acreage). It may be unrealistic to assume a high prevent-plant amount this year, and many traders feel that the USDA plantings forecast for all crops may be underestimated by 2-3 million acres. 25, 2, 15, Soybeans - COT - Futures & Options Non-Commercial - No CIT Net Position Number Of Contracts Hard to Avoid Burdensome Supply for 216/17 Looking ahead at the US Soybean Supply/ Demand outlook for the 216/17 market year, if we assume planted area is unchanged from last year and the yield comes in at 47 bushels per acre, ending stocks could come in at 627 million bushels (which would be a new record high). If the weather this spring is wetter than normal, traders will expect producers to shift some of their acreage from corn to soybeans which have a shorter growing season. The recent flooding from Texas up to Missouri might have already shifted some acres that way. The enclosed supply/demand table shows some what-ifs for the new crop season using various yields. We reduced our demand outlook numbers from the USDA s Outlook Conference forecasts because we feel that the record production in South America and the strong US dollar will hurt US soybean exports (The far right-hand column of the table shows the Outlook Conference numbers). If yield comes in 3% above the USDA forecast, ending stocks could swell to a record-high 72 million bushels. If there are minor weather issues and yield is 3% below the USDA s number, ending stocks could still come in at 492 million bushels. The exercise illustrates the difficulty the bull camp faces this year unless there is a major yield-reducing weather problem. Million Bushels 1, 5, -5, -1, -15, -2, 75 7 65 6 55 5 45 4 35 3 25 2 15 1 5 26 27 28 215: USDA Estimate 216: Hightower Forecast 239.13 329.4 278.44 292.3 29.11 334.81 183.46 131.84 199.81 348.48 29.16 247.76 28.8 178.32 112.4 255.74 449.34 573.83 213 US Soybean Ending Stocks 215 25.3 138.19 15.87 215.2 169.39 14.54 92.1 191. 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 213 215 216 45. 216 627. Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 3
The March 1st stocks report will give traders a good measure of recent demand and help determine just how high ending stocks might be for the 215/16 season which will be beginning stocks for 216/17. We estimate March 1st stocks to be near 1.585 billion bushels which would be the third highest on record (see chart). El Niño Still Bullish for Soybean Oil While there is a bearish supply outlook for soybeans and meal, the El Niño weather issues for Malaysian and Indonesian palm oil production can still have a significant, positive impact on all vegetable oil prices. The chart (page 2) covers the period following the last major El Niño phase of Million Bushels 2,2 2, 1,8 1,6 1,4 1,2 1, 8 6 4 2 US Soybean March 1st Grain Stocks 216: Hightower Estimate 89.25 1,55.51 1,19.12 1,177.34 1,215.57 1,21.62 1,37.2 1,19.36 1,55.75 1,22.92 1,457.34 1,395.99 1,43.91 1,335.99 1,22.3 95.85 1,381.36 1,669.21 1,786.89 1,433.98 1,31.79 1,27.7 1,248.8 1,374.49 998.2 993.83 1,326.6 1,585. 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 213 215 216 USDA SUPPLY/DEMAND "What If's" for 216/17 US SOYBEANS Mar Mar Mar USDA USDA USDA USDA Yield Yield Outlook 6-7 7-8 8-9 9-1 1-11 11-12 12-13 13-14 14-15 15-16 Up 3% Down 3% Conf. Planted Area (M Acres) 75.5 64.7 75.7 77.5 77.4 75. 77.2 76.8 83.3 82.7 82.5 82.5 82.5 Harvested Area (Acres) 74.6 64.1 74.7 76.4 76.6 73.8 76.1 76.3 82.6 81.8 81.6 81.6 81.6 Yield (Bu/Acre) 42.9 41.7 39.7 44. 43.5 42. 4. 44. 47.5 48. 48.1 45.3 46.7 Beginning Stocks (M Bu) 449 574 25 138 151 215 169 141 92 191 5 5 46 Production 3,197 2,677 2,967 3,361 3,331 3,97 3,42 3,358 3,927 3,929 3,925 3,697 3,81 Imports 9 1 13 15 14 16 41 72 33 3 3 3 3 Supply,Total 3,655 3,261 3,185 3,514 3,497 3,328 3,252 3,57 4,52 4,15 4,455 4,227 4,3 Crushings 1,88 1,83 1,662 1,752 1,648 1,73 1,689 1,734 1,873 1,87 1,88 1,88 1,9 Exports 1,116 1,159 1,279 1,499 1,55 1,365 1,317 1,638 1,843 1,69 1,725 1,725 1,825 Seed 8 89 9 9 87 9 89 97 96 96 96 96 86 Residual 77 5 16 2 43-2 16 1 49 34 34 34 39 Use, Total 3,81 3,56 3,47 3,363 3,282 3,159 3,111 3,478 3,862 3,69 3,735 3,735 3,85 Ending Stocks 574 25 138 151 215 169 141 92 191 46 72 492 45 Stocks/Use Ratio 18.6% 6.7% 4.5% 4.5% 6.6% 5.4% 4.5% 2.6% 4.9% 12.5% 19.3% 13.2% 11.7% Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 4
1997/98. The July 1998 Soybean and Soybean Meal contracts remained under pressure into June 1998, while July Soybean Oil rallied sharply. This illustrates how soybean oil could rally even if there is another leg down in soybeans into the summer. March Rally Helps Correct Oversold Status The soybean market experienced an impressive rally off of the early March lows, correcting some of the market s oversold condition. The Commitment-of-Traders reports as of March 15th showed that trendfollowing fund traders were net short 26,718 contracts, down from the record net short of 135,44 contracts. This has left the market a little less oversold. July Soybeans should see good resistance at $9.25, and a close under $8.87 3/4 would open the door for a resumption of the downtrend, with the next target at $8.35. With the overall trend down, we will look to position for another leg down in April going into the planting season. The release of the March 31st report makes that a key volatility date, so we will consider spread strategies in soybean options that will allow us to lift one a leg at a profit, in case the reports are perceived to be bullish, for a temporary bounce. Consider the following: Suggested Trading Strategies 1) Bear Put Spread - BUY 1 July Soybean $9. put and SELL 1 July Soybean $8.6 put for a net cost of 15 cents. Use an objective of 34 cents on the spread, and risk a total of 6 cents. If the market rallies off the March 31st reports, consider lifting the short July $8.6 put position, and hold the July $9. put until July Soybean futures reach the $8.35 objective. 2) SELL 1 July Soybean $8.8 put for around 17 cents, and BUY 6 July $8.2 puts for 3 ½ cents each for a net cost of 4 cents on the spread. If in 4 days July Soybeans are trading near $8.35, the spread should be trading for around 32 1/2 cents, a gain of 28 ½ cents. This position allows for plenty of flexibility for the report. If the market rallies off the March 31st reports, consider lifting the short July $8.8 put position for a gain, and hold the July $8.2 puts until July soybeans hit the $8.35 objective. Risk a total of 12 cents on the spread, and do not hold past May 2th. Nov Soybeans - Price Changes After March Planting Intentions 15 125 Day Of 7 Days One Month 1 75 5 25-25 -5-75 -1 2 21 22 23 24 25 26 27 28 213 215 Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 5
CORN While it is difficult to see a bullish set-up for soybeans without significant help from the weather, the corn market seems to have already priced much of the short-term bearish fundamental news, and a minor setback in yield for the new crop season could leave the market with relatively tight supplies and in need of a weather premium. The March 31st Prospective Plantings and Grain Stocks report will provide the market with a better indication of new crop fundamentals. With Chinese corn prices down closer to market levels combining with the China lifting its 9-year ethanol production ban means we could see a surge in China's use of its domestic stockpile for feed and fuel production. Chinese officials, in fact, are expected to soon release a plan for selling part of the governmentowned reserves. This could mean a possible significant jump in global corn usage. Preliminary Plantings Estimates may be Too High Over the past 15 years, the March 31st Prospective Plantings number (based on a survey of US farmers) has varied from 5.18% above to 4.27% below the USDA s February Outlook Conference estimate. At the Outlook Conference this year, the USDA forecast corn planted area at 9. million acres. The data in the enclosed table suggests that the Prospective Plantings number is likely to fall within a range of 86.1 to 94.6 million acres, and mostly likely in the 88.2 to 91.8 million range. Similar to soybeans, there has been an above-average amount of prevent-plant acreage over the past few years, However, it may be unrealistic to assume a high prevent-plant amount this year and many traders feel that the USDA plantings forecast for all crops may be underestimated by 2-3 million acres. With Billion Bushels 2.4 2.1 1.8 1.5 1.2.9.6.3..85 1.558.426.883 1.38 US Corn Ending Stocks 1.787 1.718 1.899 1.596 1.87.958 2.114 1.967 1.34 215: USDA Estimate 216: Hightower Forecast Corn Planted Area: USDA Outlook Conference Vs. March 31st Prospective Plantings Year Outlook Conference 1.624 1.673 1.78 March 31st Prospective Plantings Change % Change (Million Acres) 21 79,6 76,693-2,97-3.65% 22 78,5 79,47 547.7% 23 8,5 79,22-1,478-1.84% 24 8,5 79,4-1,496-1.86% 25 82, 81,413-587 -.72% 26 81,5 78,19-3,481-4.27% 27 86, 9,454 4,454 5.18% 28 88, 86,14-1,986-2.26% 88, 84,986-3,14-3.43% 88, 88,798 798.91% 92, 92,178 178.19% 94, 95,864 1,864 1.98% 213 96, 97,282 1,282 1.34% 92, 91,691-39 -.34% 215 89,1 89,199 99.11% 216 9, 1.128.989.821 1.232 1.731 1.837 1.135 Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 6
USDA SUPPLY/DEMAND "What If's" for 216/17 US CORN Mar Mar Mar Bull Case USDA USDA USDA 5% down Outlook 7-8 8-9 9-1 1-11 11-12 12-13 13-14 14-15 15-16 2-yr trend Bear Case USDA Planted Area (M Acres) 93.5 86. 86.4 88.2 91.9 97.3 95.4 9.6 88. 89. 91.5 9. Harvested Area (Acres) 86.5 78.6 79.5 81.4 83.9 87.4 87.5 83.1 8.7 81.6 83.9 82.3 Yield (Bu/Acre) 15.7 153.3 164.4 152.6 146.7 123.2 158.1 171. 168.4 159.5 169. 168. Beginning Stocks (M Bu) 1,34 1,624 1,673 1,78 1,128 989 821 1,232 1,731 1,837 1,88 1,837 Production 13,38 12,43 13,67 12,425 12,314 1,755 13,829 14,216 13,61 13,18 14,181 13,826 Imports 2 14 8 28 29 16 36 32 5 5 5 4 Supply, Total 14,362 13,681 14,749 14,161 13,471 11,94 14,686 15,479 15,382 14,95 16,111 15,73 Feed & Residual 5,858 5,133 5,11 4,777 4,52 4,315 5,4 5,324 5,3 5,425 5,425 5,425 Food, Seed & Industry 4,442 5,25 5,961 6,425 6,421 6,38 6,493 6,56 6,595 6,595 6,595 6,6 Ethanol for Fuel 3,49 3,79 4,591 5,19 5, 4,641 5,124 5,2 5,225 5,225 5,225 5,225 Domestic Total 1,3 1,159 11,62 11,22 1,941 1,353 11,534 11,883 11,895 12,2 12,2 12,25 Total Exports 2,437 1,849 1,979 1,831 1,541 73 1,92 1,864 1,65 1,75 1,75 1,7 Use, Total 12,737 12,8 13,41 13,33 12,482 11,83 13,454 13,748 13,545 13,77 13,77 13,725 Ending Stocks 1,624 1,673 1,78 1,128 989 821 1,232 1,731 1,837 1,135 2,341 1,978 Stocks/Use Ratio 12.8% 13.9% 13.1% 8.7% 7.9% 7.4% 9.2% 12.6% 13.6% 8.2% 17.% 14.4% the extremely depressed prices, we have already heard acreage estimates as low as 87 million. We estimate planted area near 89. million acres, down 1 million from the USDA. Winter wheat plantings were down 3 million acres and many traders see this land moving to corn. However, our studies have shown that there is not a strong correlation between low wheat acreage and higher corn acreage. Instead, there is a 5-5 chance that when wheat acreage is down, that corn acres will be down. In other words, when producer profitability is down, there may be lots of fringe acres which will simply not get planted. Trendline Yield Less Likely as Fertilizer Use Declines Looking at the US corn supply/demand outlook for 216/17, if we assume planted area comes in at 89 million acres (down 1.1% from the preliminary USDA estimate) and the yield comes in at 159.5 bushels per acre (still fourth highest on record), ending stocks could come in at just 1.135 billion bushels, with a stocks/usage ratio of 8.2%. This would be the fourth tightest corn market in 42 years. If the weather this spring is wetter than normal, traders will expect producers to shift some of their acreage from corn to soybeans, which have a shorter growing season. The recent flooding from Texas up to Missouri might have already shifted some acres. The enclosed supply/demand table shows some what ifs for the new crop season using various yields and planting totals. With the bull case laid out above, the bear case cannot be ruled out. If planted acreage is revised higher to 91.5 million bushels and yield comes in at 169 bushels per acre, US ending stocks could swell to 2.341 billion bushels, which would be a 29-year high. But while US producers may make a strong effort to get corn acres planted this year, we expect a sharp drop in inputs like fertilizer due to low corn prices, making a yield this high difficult to attain. The March 1st stocks report will give traders a good read on recent demand and help the market determine just how high ending stocks might be for the 215/16 season which will be beginning stocks for 216/17. We see March 1st stocks near 7.78 billion bushels which would be up 3 million from last year and the highest since the late 198 s. It is not uncommon for the actual March 1st stocks to come in 15 million bushels or more above or below the average trade estimate as feed usage for the Dec Feb quarter is difficult to predict. As a result, there has been active and volatile trade after the release of this report. Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 7
Corn Historically Oversold The other grain markets experienced an impressive rally off of the early March lows, which corrected some of those markets oversold condition. December corn posted a key reversal on March 2nd, which is a technical sign that a major low may be in place. However, fund traders sold more corn on the early part of the rally, leaving the corn market historically oversold going into the planting season. The Commitment of Traders reports as of March 15th showed trend-following fund traders (hedge funds) holding a net short position of 227,75 contracts. The previous week was a record 265,394 contracts. There are a number of events that could spark aggressive buying in the weeks ahead: 1) Wet spring weather, which leads to less planted area, 2) Too much dryness in either a major growing area of the US or in regions of Brazil where their second corn crop is developing and April/May weather is critical to yield, 3) A general re-inflation of commodity markets if there is any sign of a strong global economy or a sharp drop in the US dollar. With fund traders already holding a near record net short position, fundamentals will need to worsen from the March 2nd lows for the market to experience aggressive new selling. If the March 31st reports are not bearish, it would appear that the market would be holding little or no weather premium, leaving it in a position for a rally into the early growing season. Billion Bushels 9 8 7 6 5 4 3 2 1 4, 3, 2, 1, -1, -2, 5.2 4.81 4.79 4.56 US Corn March 1st Grain Stocks 216: Hightower Estimate 5.68 4. 5.59 3.8 4.49 4.94 5.7 5.6 6.4 5.8 5.13 5.27 6.76 6.99 6.7 6.86 6.95 Corn -COT -Futures & Options Non-Commercial - No CIT Net Position Number Of Contracts 7.69 6.52 6.2 5.4 7.1 7.75 7.78 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 213 215 216 With the possibility that a major low is in place, we will look to position for a slow but steady grind higher into June. A base position of long December futures is -3, 26 27 28 213 215 216 Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 8
advised, but traders will need protection for the March 31st report just in case producers intend to plant significantly more acres. 6 5 Dec Corn - Price Changes After March Planting Intentions Day Of 7 Days One Month 4 Suggested Trading Strategies 3 1) BUY December corn (near $3.84 1/2) and also SELL 1 September corn $4. call (near 18 cents) and BUY 1 September corn $3.7 put (near 21 cents). If September corn breaks after the March 31st reports, lift both of the options for a gain and hold December futures for a run to $4.31 3/4. Risk a total of 13 cents on the entire position. 2 1-1 -2-3 -4 2) BUY December corn at $3.79 1/2 with an objective of $4.31 3/4. Risk to $3.65 1/2. 2 21 22 23 24 25 26 27 28 213 215 WHEAT The March 31st acreage and stocks reports are not as volatile for wheat as the other grains. Winter wheat plantings have already been released and are down 3 million acres from last year. Given the very cheap price, we would expect the acreage report to carry a bullish tilt as producer incentive to plant spring wheat is weak. The market seems to be probing for a major low as world stocks have increased for three years in a row to a record high for the 215/16 season. At present, it appears that global production will be similar or just slightly higher than global demand for the coming year but the weather in the next six weeks will have a significant impact on the global stocks outlook. 4, 2, -2, -4, -6, -8, -1, -12, -14, -16, 26 Chicago Wheat - COT - Futures & Options Non-Commercial - No CIT Net Position Number Of Contracts 27 28 213 215 216 It may take a significant weather issue from a major world exporter (EU, US, Canada, Australia or Black Sea) to expect any type Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 9
of extended bull trend. The US crop has already been hit with one cold snap and the market will remain vulnerable to either cold weather or dryness in the western plains for production losses. There seems to be plenty of uncertainty over the size of the Indian crop and with the oversold condition basis the COT report, it may be hard to find a situation more bearish than near the March low unless weather stays near ideal in the weeks ahead. Talk that Indian production could be down 13 million tonnes from their current government forecast failed to provide much support recently. In fact, the India Agriculture minister suggests that some damage was done with recent rains and hail but losses will be closer to 1-2 million tonnes; not 13 million. The March 1st stocks report will give traders a good measure of recent demand and help the market determine just how high ending stocks might be for the 215/16 season which will be beginning stocks for 216/17. We see March 1st stocks near 1.342 billion bushels. The Commitments of Traders reports as of March 15th showed trend-following fund traders were net short 114,921 contracts which is not far off of the record net short of 149,226 contracts which occurred on March 1st. July wheat is still operating under the positive technical influence of the March 2nd key reversal. With the extreme oversold condition, it will not take much in the way of positive news to spark aggressive buying and short-covering. Million Bushels 2, 1,8 1,6 1,4 1,2 1, 8 6 4 1,227.71 943.11 1,397.68 891.98 1,48.29 1,27.99 969.2 823.46 821.82 1,166.56 1,45.41 1,416.52 1,338.4 1,29.77 Suggested Trading Strategies 1) BUY July wheat (near $4.68) and also BUY 2 of the July wheat 46 puts near 9 ½ cents each. If wheat breaks after the March 31st reports, lift one or both of the puts for a gain and hold July futures for a run to $5.17. Risk a total of 12 cents on the entire position. US Wheat March 1st Grain Stocks 216: Hightower Estimate 96.63 1,2.62 984.39 972.22 856.73 79.27 1,4.6 1,356.36 1,425.3 1,199.35 1,234.83 1,56.97 1,14.41 1,342. 2 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 213 215 216 Disclaimer The information in this report may be considered dated upon its release and should not be considered interpersonal advice. This report is merely an opinion on the market and is a reflection of conditions as of its publication. Market conditions change! Traders should not consider entering positions without their own independent analysis of the market s current situation, nor without further consideration of any changes to the information contained herein that may have occurred since this report was written. The authors are not responsible for any verbal or written claims and opinions that might be provided in conjunction with this report. The trading suggestions contained herein have been provided merely as a general guide and only for the purpose of quantifying the authors opinions. This report includes information from sources believed to be reliable but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. This report should not be construed as a request to engage in any transaction involving the purchase or sale of a futures contract and/or commodity option thereon. The risk of loss in trading futures contracts or commodity options can be substantial, and investors should carefully consider the inherent risks of such an investment in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of The Hightower Report is strictly prohibited. Investors should carefully consider the inherent risks of such an investment in light of their financial condition. Page 1