USDA the Decider for Wheat
Production will be lower even with average yields.
Bryce Knorr
Published: May 11, 2009
Tuesday's USDA report won't be the last word on the 2009 wheat market, but it could go a long ways to signal whether, and how much, prices break into harvest. The agency issues its first official production estimate of winter wheat, amid a lot of uncertainty about how drought, frost and flood have affected yields and abandonment.
Despite the travails suffered by the crop, overall conditions look average, thanks to good rains in Kansas that helped ratings there. While plenty of question marks remain, only visible evidence the crop is suffering is likely to contradict a possible assessment from USDA's survey.
Even with average yields, production will be lower, and the fate of the spring wheat crop is still very much in question too, as farmers face more rain that may only compound existing delays. Still, end users don't appear concerned, and until they start buying a short covering rally by the funds — the source of last week's rally — may be the best to hope for.
To read Bryce Knorr's complete weekly wheat review, click HERE.
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