The wheat market could use a good rally right now. Whether it gets it depends almost entirely on how weather shapes up in coming weeks.
Key states issue updated crop ratings Monday afternoon, with the trade watching Kansas for direction. Rains all winter have followed the same pattern, hitting eastern areas but bypassing significant chunks of the west. That pattern doesn't look ready to change soon, which could begin to threaten yields.
Unfortunately, it likely will take a significant reduction to make much difference. While world production should be down in 2009, demand remains constrained by the global economic crisis. The huge crop of 2008 hasn't rebuilt stocks to historical levels, but it has likely provided enough of a cushion unless output really takes a hit due to weather problems, reduced fertilizer usage and lower acreage.
To read Bryce Knorr's complete weekly wheat review, click HERE.
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