Predicting the impact of events in Ukraine on the wheat market takes a time machine, not a crystal ball. I didn't expect USDA to make any changes to its domestic supply and demand balance sheet as a result, and it didn't, leaving carryout unchanged and making only minor tweaks on the world stage.
It was that second part of the report that caught the trade off guard. Again, I didn't expect USDA to change its world stocks much either. But changes could indeed be coming down the road, with the weather watch on for 2014 production.
Kansas, Texas and Oklahoma updated crop ratings today, with overall yield potential rising a quarter of a bushel per acre nationwide. The downtrend in conditions appears to be stabilizing, while the extent of winterkill starts to be felt. Dry conditions persist on the western Plains, but overall hard red winter wheat looks like it should get at least some moisture over the next two weeks.
Overall production could still go lower if growers on the Plains opt for soybeans instead of spring wheat. Those who have the capacity likely will be tempted, because prices are below breakeven. A large crop sitting in Canada, still, and terrible basis for old crop should only reinforce this trend.
Download the complete Weekly Wheat Review 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 Adviser. 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.
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