This article is brought to you by:
CONSENSUS

ALLENDALE, INC.
4506 Prime Parkway, McHenry, Illinois
800-262-7538

(March 1, 2002) WHEAT: We trust our historical data is correct and a good reason why in the past two weeks we have 40% of our new-crop hedges on via the July at a average of 2877. Our three year average July wheat futures study suggest futures could be toppy at the 2880 level and yet may find 2720 support while in the month of March. However, the study also suggest the trend out of March into July is down if it follows its three-year historical path. Our month of March trade study suggest the odds favor the short side of May futures six out of ten years on average to finish lower at the end of the month of March than where they finished at the end of February. Large deliveries with weak stoppers has added pressure to old-crop futures and these are just a few reasons why we switch from a long May 2800 call option position to a short. Weekly export sales for the 2001/02 marketing year have about 13 weeks remaining and the fact sales are running 14% behind their five-year average does not bode well for a long trade. Also consider the fact India will soon begin their wheat harvest with Pakistan, Turkey, Mexico, and Saudi Arabia in their combines in another month. Our old-crop is really becoming old news very fast. We will look for a spot to sell May futures on a corrective rally up against resistance. Supportive news comes from dry weather talk in China, Canada and the U.S. and yet could be countered by potentially large crops targeted for Australia and the European Union. Trend line support has been taken out of the weekly charts and rest on 2700 support. If 2700 is taken out look for a move to the 2620 level.

 

Joe Victor
www.allendale-inc.com

Hosted by:
CONSENSUS, INC. AND INVESTORS CO-OP
P.O. Box 520526
Independence, MO 64052-0526
816-373-3700
Fax: 816-373-3701
editor@consensus-inc.com