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

(March 22, 2002) WHEAT: Even though the amount of hard red winter wheat produced is nearly double what the amount of soft red winter wheat is produced, the majority of the trade volume remains in the CBOT market. Talk of winterkill in the Plains and better than average weekly export sales were enough to push July wheat futures above the weekly high during Friday's trade, but a close below the days open and below last Friday's close keeps overhead pressure on. Plenty of moisture in the Ohio and Tennessee Valley regions, maybe too much when the crop comes out of dormancy. Still dry in the hard red winter western Kansas and Oklahoma regions, but

we estimate the trade could be content to let July CBOT futures remain in sideways range bound trade until both crops are more fully removed from their dormant state. July CBOT futures resistance remains at 2880 with support at 2800. We have 40% of our new-crop production hedged at the 2870 level and will place a JIC order at the 2950 level. Our 3-year average study suggest July futures have had the tendency to ease into June. Dry weather was especially hard on wheat production last year, but other than western Canada and regions of China, most other countries appear poised to push the production lever to full speed ahead for 2002. We are willing to trade wheat futures within the range stated, with a longer term bias to the downside.

 

Joe Victor

www.allendale-inc.com

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