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(March 28, 2002) CORN: There was nothing inspiring in the key reports released by the USDA this week. The Planting Intentions Report shows that 79.047 million acres of corn will be planted this spring. This was above trade estimates and 3.2 million acres higher than in 2001-02. Large increases were shown in the southeast, which can be questioned because of extreme wet field conditions. Grain stocks are estimated at 5.796 B.B., which was below estimates and suggests consumption is not as great as traders had expected. The reports indicate if corn is to rally this spring, it will have to come from weather. The funds are short but there is little that will force them to abandon their position. Export inspections were in line with estimates at 41.8 M.B. and above the average needed to reach USDA's target of 1.925 B.B.

July corn fell to 210.25 this week, a new contract low, and made a slight recovery. The market is approaching an oversold level but the fundamentals do not justify much of a rebound. Resistance should be encountered at 216 and a rally above 219.5-222.5 is needed to turn the trend higher. Unless this occurs, prices could fall to 206-203 with 194 the extreme. December futures could decline to 215-210. As mentioned in last week's comments, when the market fails to rally in March, it usually works lower until late April to mid-May or possibly late June before bottoming. Watch the period around April 4th for signs of an early low.

Dewey Strickler

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