A spring rally to draw acreage is likely and would be a good time to begin forward sales of 1998 production. USDA projects increased carry out stocks come August 31 st and that may pressure prices lower. New crop November futures are also looking for support. Large stocks and a likely increase in acreage weigh heavily over the market despite very large domestic demand and some harvest problems in Brazil. Wheat Market Outlook - July wheat futures have traded within a wide range since last fall.
Prices are currently near the bottom of the range and continue to show weakness.
Large domestic stocks combined with very large global supplies will keep the markets from developing a strong rally unless weather threatens the crop in a major way. We are fast approaching a time of seasonal weakness in the spring, so use any rallies to forward price 1998 production. Milk prices have exceeded expectations and current prospects suggest that prices for the next several months will be higher than previously anticipated. Still supply and demand remain well balanced. In this situation market conditions can change rather quickly once spring milk hits the processing plants.