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505-769-3300(March 16, 2000) WHEAT: Wheat prices turned short-term trends up and must remain above $2.61 basis the May Chicago wheat if prices are to continue higher? Corn and soybean prices have helped to support wheat prices. Improved weather conditions across the major winter wheat growing areas may add some pressure this week. The short-term weather outlook is forecasting more moisture across major wheat growing areas this week. Fundamentally, this market is slowly running out of supportive factors which could take prices higher. The closer we get into spring, the less likely it will be that an Arctic frontal system will appear. Aside from the dry weather pattern which seems to be changing, most analysts seem to be fixed on production estimates which are most likely priced into the market. The dry weather problem is not completely over, but has subsided for the moment. Another recurrence of a lengthened dry weather pattern could possibly take prices back up, but we don't see anything to generate any substantial rallies at this time other than a surprise "cold snap?" Exports are still suffering from the high U.S. Dollar, world competition and supply problems. Technically, short-term charts turned higher for a couple of days, but a close below $2.61 basis May wheat would most likely turn prices lower again. We're holding out some hope that higher corn and soybean prices could drag wheat prices up just a little higher? Corn and bean prices looked like they had some upside potential earlier this week, but now this seems to be in question? A break below support would project prices back to contract lows. If this occurs, we would expect to see much of the crop grazed, plowed or turned into hay?
SHORT-TERM TRENDS--Sideways?
LONG-TERM TRENDS--Down.
Bryon Fillpot
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