WEEKLY WHEAT REVIEW: New Crop Concerns Take Center Stage

USDA numbers and cold weather are major factors.

After months of trying to break free of bearish outside influences, the wheat market faces a big test this week on two fronts as the market's perspective shifts squarely to new crop. First, on Monday USDA releases its first estimate of winter wheat seedings, which are expected to decline. Then later in the week the coldest weather of the winter descends on the Midwest with temperatures cold enough to cause winterkill on bare fields.

The outcome of these events could determine whether wheat is able to maintain its attempt to turn towards a more bullish seasonal pattern. But ironically, the ongoing rally may also depend on the ability of competing crops, especially soybeans to continue moving higher.

Farm futures is expecting winter wheat seedings to fall to 45 million, down from 46.1 in 2008, due mostly to lower plantings of soft red winter wheat. The number could turn lower; many growers were turned off by weak wheat basis. But good moisture conditions, especially in the leading state of Ohio, along with generous crop insurance guarantees, may have convinced many producers to keep seedings up.

To read Bryce Knorr's complete weekly wheat review, click HERE.
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