Wheat Holding Lows -- By a Hair

Intraday shows overnight collapse mirroring equity markets.But the daily chart shows wheat barely hanging on above recent support levels.
Bruce Knorr:
The struggles of the wheat market to rally recently speak volumes about the state of the futures trade in 2009. Rallies, big ones, are still possible, but only for the favored few that have strong fundamentals.
In a normal year, wheat likely would be rallying. While the soft red winter wheat crop in the eastern Midwest is in good shape, hard red wheat on the Plains faces greater unknowns. Farmers on the northern Plains are still trying to get the spring wheat crop in the ground, and the forecasts don’t look all that promising. While warmer weather is helping reduce flood threats, regular storms are moving through, and the long-range forecasts out last week call for above normal precipitation over much of the growing region.
To the south the hard red winter wheat crop is still reeling from the freeze earlier this month. Crop ratings dropped sharply in Oklahoma last week, though less damage emerged in Kansas. Other areas, including Texas, are suffering from long-term drought that last week’s rains won’t help. And the forecast into summer is for warmer than normal temperatures over the region.
Still, with demand relatively lackluster, the market lacks a spark. There’s still a little time seasonally for a rally, so with the market down, it’s worth the wait. Besides, crop insurance and the new ACRE program likely will provide significant downside protection.