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(March 14, 2002) WHEAT: Talk continues to circulate that there may be problems with the winter wheat due to dry weather and cold weather in the Plains, but it is winter wheat after all, meaning that cold is not necessarily that much of an issue for it. And it is only now coming out of dormancy as it warms. This suggests that any problems as a result of dryness may be minimal. Otherwise, exports are slow with no change in sight. The chart ultimately allows for further downside, possibly as much as 30 cents, but I am a bit skeptical of that point. For now I remain on the sidelines. I wouldn't be surprised to see a near immediate failure from current levels.

In the salt in the wound dept., Brazil is expected to increase their wheat production by about 20% to 3.7 MMT for 2002. Since Argentina typically supplies wheat to Brazil, this is unlikely to impact the U.S. in a serious way, but it may ultimately mean more Argentine wheat for sale on the world market.

M. Steven Morgan

www.commodityreview.com

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