CROPS

The big USDA report last Friday brought only a little news for wheat markets.

Ending stocks of all wheat in the U.S. are expected to total 825 million bushels, a downward revision of 20 million from the previous official monthly projection.

This was considered mildly supportive for wheat prices, especially next to the lower global wheat supply estimate for the year, which was given to be 209.58 million metric tonnes, some 3.52 million tonnes lower than the previous month's figure, which was itself a record high 213.1 million.

Although for many these figures may be stunningly useless, having no decent frame of reference with which to judge them, it is enough to say that from this report the trade perceives a very adequate supply of wheat available in the world for the current year. This perception will have to change significantly to cause much money to move into or out of wheat.

For now, most traders are looking toward other pricemoving drivers for price direction.

In response to the report, the Chicago May wheat futures price moved upward 6.5 cents per bushel Friday and followed up with another dime on Monday to close at $6.51, once again within pennies of the center of the now nearly 6-month-old trading range. Pacific Northwest white wheat prices for Portland are steady-to-firmer at about $7.12 per bushel, in an even narrower range than Chicago.

When any market has been in a tight price range for this length of time, with supply and demand forces balanced to such a fine degree, an expectation that something will come along to change that balance begins to build.

Overall, the wheat market is healthy. Export sales are rolling along, weather in most wheat production regions has been reasonable and the currency markets have been stable. There is sympathetic support from corn, which has been seeing good sales to China and some crop development problems in South America.

Sometimes we have to wait for the market to tell us when to move. A breakout from the well-defined price range will be along presently.

Information and opinions contained herein come from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.