Passage 1

Review of Markets一Corn Futures

Futures market for corn, wheat and soybeans have a tough act to follow in 1997. The past 12 months featured some of the most volatile grain prices in recent history, as weather moved the market dramatically. Records were set for both price and volume. Corn-futures prices marched up 57% from the beginning of the year. Wheat-futures prices also skyrocketed to an all-time high to about $ 7 a bushel, doubling in prices since early 1995.

Increasing world-wide demand and an expectation of record-low crop production because of unfavorable weather led to high prices early in 1996. For wheat, conditions stayed dry through May， while for corn and soybeans, weather remained dry in key producing regions into June. Because of the weather early in the year, the nation's granaries held a precariously low amount-just 426 million bushels of corn at one point in September, the lowest level since the 1970s.

But just when supply concerns pushed prices into the record-breaking range，rains and interna-tional supply spoiled the bullish party. Farmers planted 8 million more acres of corn alone in 1996 and large crops also came from Europe and Australia. The high price encouraged shifts in planning-area and yield went up. Soybean demand could outpace its grain cousins because of the rapid growth in China, which recently switched from being an exporter to an importer of soybean products. And if there are any problems with production, the market is liable to have a large price advance.

The grain prices kept stable during the past 12 months.