There may be an underlying bullish tone to the wheat markets. Technical signals indicate that wheat prices may have found a bottom. Some wheat did not get planted and U.S. winter wheat planted acres are the lowest since 1913.

Fields are extremely wet, and winter wheat producers should be top dressing wheat with nitrogen (N). Not only can’t the N be applied, excess moisture tends to leach N out of the root zone. Lack of available N could result is lower yields (higher prices) and relatively low protein wheat (lower basis and prices).

Wheat exports sales and shipments are finally in line with USDA’s projections. Some analysts expect USDA to raise wheat exports 25 million bushels. Wheat prices declining -90¢ in January and early February resulted in U.S. wheat prices becoming more competitive in the world market.

On the negative side, U.S. wheat ending stocks are projected to be the highest since 1987. World wheat ending stocks the highest since 2001. Partially offsetting the increased ending stocks is the increase in world wheat use.

In 1987, world wheat use was 18.4 billion bushels. World use was 20.3 billion bushels in the 2001-2002 wheat marketing year and is projected to be 22.5 billion bushels in the 2009-2010 marketing year.

Relatively high wheat stocks set the stage for the 2010-2011 wheat marketing year. India will harvest the first wheat crop. India’s wheat harvest is expected to be a record or near record. India is exporting wheat for the first time in six years.

The bullish tone may be the market adjusting prices that were too low. Relatively high U.S. and world wheat stocks will limit upward price movements. More will be known about June 2010 wheat price expectations when the winter wheat comes out of dormancy in March. It also must be remembered that the U.S. winter wheat yields are determined by the weather in April and May.

Current market conditions indicate 2010 Chicago Board of trade and Kansas City Board of Trade July wheat contract prices in June should be in the $5.25-5.50 range.