Wheat Smashes More Barriers
Market could face a turning point.
Bryce Knorr
Published: Jun 1, 2009
The six-week rally in the wheat market has proceeded in relatively orderly fashion, marching steadily higher. But the tone of the buying began to change on Monday, as the market completed a move of more than $1.75 off its lows in Chicago.
Indeed, the scope of the rally is almost the same at its rebound in December and January. With harvest approaching, the market could well face a turning point. Prices could head higher, with a blow-off top, or the market may be about ready to give a bearish signal, setting up at least some type of break into harvest.
Perceptions of the size of that harvest are only part of the equation. While rains across the Plains, Midwest and South continue to fall in many of the wrong places, crop ratings are not falling sharply. Overall my model declined this week about 12 million bushels for winter wheat; coupled with falling potential for spring wheat production that suggests of crop of 2 billion bushels. Supplies would still be adequate, though stocks of good quality wheat likely will be at a premium.
To read Bryce Knorr's complete weekly wheat review, click HERE.
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