In wheat, where crop prospects continue to show improvement in the Southwest, we are not seeing even the modest gains that we are seeing in corn and early in soybeans in Tuesday's trade. All three of these crops are caught in a bearish scenario with prices relatively low in a historical context. Soybeans are arguably the most bearish of the three. Users of soybeans and soybean meal who have long hedges in place might want to think about taking profits on rallies to those pricing objectives. This market is not going to burst to the upside with the large stocks and the large potential crop that we are seeing until and if we get a really bad weather scenario in the summer months.
Corn looks only slightly less bearish.
Rallies back toward those levels ought to be seen as significant forward pricing opportunities, and we have an excellent opportunity for users to place or replace long hedges at very attractive price levels. I would get those long hedges established now and be prepared, as a selective hedger, to take profits on rallies to the pricing objectives that producers will be waiting on and hoping for. This has not been the case, however, in Kansas City where the hard red winter futures are traded. Rallies in this wheat market need to be sold and producers' pricing activities need to be aggressive.