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(March 26, 2002) WHEAT: Wheat prices have slowly gained in price, but this market seems to be fighting every step. The nearby May Chicago wheat was able to close above an important resistance level this week at $2.87, but follow through buying is still needed to convince the traders that prices are still headed higher. There will be another USDA Grain Stocks and Planting Intentions report out this Thursday. There should be few changes in planted acres, but we could see some changes in overall production. The USDA increased projected U.S. ending stocks on the last report by cutting exports. These adjustments were not huge, but have halted any attempts for prices to move higher in the last month. There seems to be a growing perception that overall world surpluses have been growing slightly. A significant drop in domestic production this year could help to support another rally, but the odds of seeing a significant rally after April diminish considerably. This is not to say prices cannot rally, we saw significant spring rallies during 1995 and again in 1996, but these are rare. The severe freezing temperatures over major wheat growing areas in the last few weeks have done extensive damage to what's left of this years crop. The potential seems bleak to see a 50 cent rally, but as long as trends remain higher, we'll continue to look for higher prices. Long-term charts are also showing signs of moving higher over the next few weeks. Aside from any major surprises in the USDA report, look for the possibility of higher prices over the next few weeks.

SHORT-TERM TREND--Higher.

LONG-TERM TREND--Higher into April.

 

Bryon Fillpot

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