CROPS

U.S. Wheat exports have expanded from the pace of recent months, but not enough to cause the stress from demand that could change the current trend. The movement in Chicago futures in the last week has been in narrow daily ranges, contained above $6.97 and below $7.27 per bushel, matching the low last seen in late June of 2012 just as the price of wheat began a climb that reached $9.47 in the then-nearest July 2012 futures contract.

There is buying support at this level, but strong reasons for global buyers to pay up for wheat are not yet on the table. USDA's export projection is beginning to look too high, implying an unfriendly adjustment in later Supply/Demand reports.

The USDA/NOAA Drought Monitor website has a very useful animated map of moisture conditions at http://droughtmonitor. unl.edu/12_ week.gif. It is clear that the harshest con- ditions continue in northwestern quadrants of Oklahoma and Kansas, most of Nebraska, and southern South Dakota. The Pacific Northwest shows no moisture problems in the major wheat-growing areas.

At this point, the greatest risk in the wheat price pattern is to the upside. Substantially lower prices would have to come from factors not yet present in the market. The trend is still negative, with obvious potential for another low about 25 cents below current levels.

No matter how low (or high) any market goes, there is al- ways a projection for another low or high to come. That is the nature of trend analysis. In the wheat market right now, those projections certainly exist in Chicago, while white wheat seems oblivious of the problem.

When the expected wheat export adjustment comes from USDA, the market will be holding its breath that morning. If the number is announced and is clearly negative, but the reac- tion of the price (after some dithering) is to close higher on the day, that will be about as clear as ringing a bell that the lows are in. The next such monthly report is this week on Friday and then again on Wednesday April 10. By then we will also be looking at weekly crop progress reports as well.

Information and opinions contained herein come from sources believed to be reli- able, but are not guaranteed as to accuracy or complete- ness. The risk of loss in trad- ing futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or op- tions, it is possible to lose more than the full value of your account. All funds com- mitted should be risk capital.