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(March 8, 2002) WHEAT: The ten-year average historical study suggest March has not been the month to hold long May wheat futures. We are presently short one call, but did use the recent rally to hedge a good chunk of this year new-crop wheat production. Our three-year average new-crop wheat price study suggest early this month has been the best opportunity to see 2800 to 2900 prices and then weaken sharply as we walk out of March into spring. The CBOT floor trade was bulled up about the poor quality crop in the southern Plains early this week. One Kansas wheat association representative said all is not lost as if rains would happen to begin by March 18 and average near ideal into harvest their states crop could come up with average production. Sure enough our 30-year precipitation data says the best chance of rain have been evident from now into June. There is hope. USDA wacked domestic and international stocks a blow today as they raised both. USDA's ag attache has announced if China is to set and use any TRQ's this year and next, look for wheat to be the champion while corn and soybeans could be dealt with much less enthusiasm. Canada and China as well as regions of the USA could end up with weather problems this spring however Australia, Russia and the EU could be ready to handle those production losses. 2800 is support in July CBOT futures with 2880 resistance.

 

Joe Victor

www.allendale-inc.com

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