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(March 6, 2002) WHEAT: Wheat prices rallied enough this week to turn short-term trends back higher. This is the second time since topping in January that trends have turned back up. Long-term indicators are also becoming "oversold" which may indicate that a turn back higher from these levels could last for several weeks. The fundamental situation is such that production should be significantly lower this year. This has seemed to matter little over the last year, but a sharp drop in production should eventually have some impact on prices. Our total domestic production makes up such a small percentage of the world production that it may be difficult to see significantly higher prices unless there are extremely large losses. Either way, trends have turned higher and we'll expect short-term targets around the $2.90 levels basis the May Chicago wheat to be tested over the next few weeks. Only a close below last weeks low of $2.75 would turn charts back down. If long-term charts turn back higher, there may be a larger move back up. A close above the $3.00 level would project back towards long-term targets between $3.40-$3.50 basis the nearby contract. This number keeps popping up each time we look above the $3.00 area and has yet to materialize. Time would tell us to give up on this market as the seasonal tendencies will be turning down soon, but with this year's crop is such bad shape and our technical picture showing improvements, we'll see just how much strength is left on this leg up.

SHORT-TERM TREND--Trend is higher.

LONG-TERM TREND--Possibly higher into March.

 

Bryon Fillpot

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