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ROSENTHAL COLLINS GROUP, LLC
144 2nd Avenue North, Nashville, Tennessee
877-853-2202(March 30, 2000) WHEAT: Wheat was down again this week as the recent rain in the Plains has substantially improved crop conditions in Kansas and Oklahoma. The crop is about two weeks ahead in development, which would make it susceptible to freeze damage if there is a cold snap. However, the trade does not appear overly concerned about this for the moment. The funds are short a nominal amount of wheat, but the small speculator is long 90 M.B., including options, which implies there is further downside potential. Export inspections were slightly better than expected at 15.5 M.B., but below the average needed to reach USDA's target of 1.050 B.B. Sales totaled 273,100 tons, down 13 percent from the previous week. Technically, July wheat is a disaster but the market should be approaching an intermediate-term bottom in which a recovery to 272 is likely sometime during the first or second week of April. However, I do not look for prices to trade above 278-280. Once the recovery is complete, the market can be expected to move lower toward the end of the month, possibly 250 or 237. Later, prices may eventually fall to the upper 220's.
Dewey Strickler
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