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Weekly Wheat Review

The wheat market has a history of being a trending market, spending relatively long periods grinding relentlessly higher or lower. Sometimes the complex is able to change directions quickly, and that certainly appeared to be a possibility this week.

The buck a bushel rally brought back memories of 2010, when prices nearly doubled in less than two months after a historic drought crushed the crop in the former Soviet Union. That region is in play again for 2012, though losses are nowhere near as devastating as they were two years ago.

Instead, lower production looms on just about every continent where wheat is grown. Most of this is well known to the market, but earlier estimates are trending lower. That appears to be happening in Europe as well as Russia, with other countries now in doubt too.

That includes the U.S., where hot, dry weather is taking the top of what looked like a big hard red winter wheat crop. Production potential in Kansas may be down by 10% once Monday's Crop Progress report is in.

The southern hemisphere is also likely to see reduction as planting hits a crucial stage. Western Australia is dry, though eastern fields could get a much-needed storm in the coming week. Rains have helped much of the wheat belt in Argentina recover from this year's drought, but acreage will be down as farmers turn to more profitable crops. Canada is one of the few exporters where problems are easing; after a dry winter, rains returned. The crop went in early on the northern Plains as well, though acreage should be way down from normal levels.

Download the complete report using the link below.

Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.