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For: Friday 11-11-2005

Recommendation #1: Buy Corn / Sell Wheat

Great Pacific and CFEA would like to THANK all of those and their loved ones who have sacrificed so much for our own freedoms. We also wish to thank all of those serving in the military now to protect our freedoms. Thank you to all who have sacrificed so much so we as a nation can enjoy our freedom!

The Corn crop is fully harvested and supply is known. Though the current supply of Corn is overwhelming current supply - as evidenced by the current sub $2/bushel prices - this may not always be the case. Several factors this year may provide some support to Corn prices in the coming months:

Firstly, corn exports should be coming back on-line as the port of New Orleans begins to operate at full capacity.
Secondly, longer-term Corn prices are near two year lows for this time of the year; as such, according to the law of demand the consumption of Corn should be increasing given the current low prices
Lastly, Corn prices are historically low compared to other competing feed products like Wheat, Soymeal, and Oats. As such, Corn is currently priced very competitively against other commodities.

Wheat futures on the other hand do not seem to be as attractively priced. First, the 2006/07 winter wheat crop has been successfully planted along normal lines, implying that the first major hurdle towards future supply has been passed. This makes future supply look more certain. Secondly, unlike the other grains which are approaching major lows, the Wheat market is still well above its 2000 lows indicating that this market may still have some downside room. Lastly, unlike the other grain futures, the Wheat market is seeing increased selling from commerical interests, who may be thinking that prices are overvalued.

The high price of wheat may not be be seen readily by looking at the charts, but when looking at the relationship between Corn and Wheat historically, it surely is. In the last 15 years, May Corn Futures have usually traded at a discount of -88 cents to CBOT Wheat. Currently, May Corn is trading at a discount of -119 cents to CBOT Wheat, which has only occured in 4 of the last 15 years.

Historically, in the last 15 years, May Corn futures have gained an average of almost 9 cents/bushel from mid November through mid February in 14 of the last 15 years versus May CBOT Wheat futures.

Though past performance is not necessarily indicative of future results, given the currently price of Corn relative to CBOT Wheat, coupled with current supply and demand trends, as well as transportation trends and the technical picture, we feel that May Corn futures look extremely attractive relative to May CBOT Wheat futures. Based on the above we are recommending the following:

Buy May Corn futures and simultaneously sell May CBOT Wheat futures on a breakout in the spread above -118 (discount to the Corn futures). Traders should initially risk the spread to a -137 discount to the Corn, with an upside objective of at least -90 cents between now and mid February 2006.

HOTLINE HYPOTHETICAL TRADES: THE PLACEMENT OF CONTINGENT ORDERS, SUCH AS A “STOP-LOSS” OR “STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS. ALSO, UNDER CERTAIN MARKET CONDITIONS – SUCH AS “LIMIT MOVES”- IT MAY BE DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THE FOLLOWING HYPOTHETICAL RESULTS DO NOT ACCOUNT FOR COMMISSIONS AND FEES, WHICH WILL NEGATIVELY AFFECT RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL IN THE FUTURE, ACHIEVE PROFITS USING THESE RECOMMENDATIONS.

SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MOST CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED IN THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING, FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL IN THE FUTURE, ACHIEVE PROFITS USING THESE RECOMMENDATIONS. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE. * The term “Draw Down” is used above to represent HYPOTHETICAL open position losses - the worst price achieved. It is presented to give a representation of adverse market movement - but not limited to - that has historically accompanied the periods studied. Refer to the Seasonal Stratagems book and the Hypothetical Risk Disclosure below for further details.

Disclosure of Risk: The risk of loss in trading futures and options can be substantial; therefore, only genuine risk funds should be used. Futures and options ARE not suitable investments for all individuals, and individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option would result in a futures position.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO, ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM, IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS, IN GENERAL, OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.