john risk - wheat price direction?, page-48

Germany, Poland, Ukraine and Russia have had 30-50% of historic rainfall levels from December til now. Similarly for the southern US states. Hardly a favourable winter.

You only need look at two things to know how crops are really doing. Rainfall to date and biomass imagery which shows moisture stress. The only analyst that does this is Martell Crop Projections.

The basis is suggesting wheat stocks are much tighter than futures markets are indicating. The basis for non US denominated wheat prices (eg Australia) should not be strong and suggests US wheat is plentiful and the cheapest in the world. However they had drought last year so this can not be the case. So you can then check by comparing cash bids in the US as opposed to the underlying Chicago futures contracts. If there is positive basis for US farmers in the cash market then the futures markets have it wrong and potentially very wrong. And of course farmers worldwide know that the authorities in charge of reporting on stocks (eg the USDA and the IGC) are overstating stocks in any case.

There's what you know and what you don't know. Its the latter that drives prices. Wheat prices are heading higher IMO.