CROPS

In the last week, Chicago May wheat futures prices have declined 30 cents from the quick spike high created at the end of March. White wheat for August delivery "new crop" in Portland declined about a dime to 15 cents in the same period, showing about $6.55, refl ecting a stable Pacific Rim market. There was a Tuesday morning USDA acreage and stocks report released before the opening of the trading session.

For wheat it was a not eventful, as the survey of analysts showed previous guesses were spot-on, with an average guess of 792 million bushels for ending stocks of wheat and a newly revised USDA figure of 793. Last year's ending stocks number was 862 million bushels, so the supply of wheat in the U.S. has declined from last year, but is not tight. The crop year under examination ends very soon on May 1, so the market has really already turned its attention to other issues.

The market's attention is focused on Northern hemisphere crop production conditions. The prominent factors are that corn planting is at record levels of completion at 7 percent in the ground versus a normal 2 percent, and spring wheat planting is way ahead of normal at 21 percent versus a normal 5 percent. All winter wheat planted last fall is showing 61 percent good to excellent overall, with steady improvement in the last couple of weeks. Add this non-threatening set of stats to the steady U.S. dollar and otherwise benign outside markets, and we have a negative picture. The wheat price charts show a shortterm downward slope, with a pending attempt to break below $6.11 per bushel in the leading Chicago futures markets in the next few days. If we see a close below that price with maybe a confirmation day or two at that level, the implication is for a newcrop low coming early this year. The current long-term trend is downward, so sales decisions should be more aggressive. When the trend changes, there will be opportunities to take advantage. For now wheat supplies are adequate for normal usage, making the market soft.

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.