A flurry of data this week caused wheat futures to set new contract highs every day as traders worried that poor weather conditions in Australia and the Ukraine, coupled with deteriorating crop conditions in the U.S., would result in lower yields and lower global wheat supplies for the coming year.

It's widely known that Australia and the Ukraine have experienced drought-like conditions in many of their wheat growing regions this year and the Ukraine has already stated that it will not export any wheat from the current season's harvest in an attempt to satisfy domestic demand first.

At the same time, rains fell across wide swaths of Oklahoma, Kansas and Missouri over the past two weeks. Though rain is usually a desirable event in June, moisture so late in the winter wheat growing season can hamper farmers' efforts to harvest their fields and seemed to worry traders because of the possibility of pest and disease damage that can accompany a late harvest and excess moisture.

Also, the Department of Agriculture's weekly Crop Progress and Condition Report on Monday showed that the average condition for both spring wheat and winter wheat had fallen from the previous week.

If this trend continues, it could result in lower yields for both crops and further strain domestic wheat supplies. Finally, the Department of Agriculture also updated its worldwide supply and demand estimates for wheat on Monday.

The release estimated that world-wide inventories of wheat over the coming year would be at their lowest levels since 1977 and estimated that the world-wide stocks-to-use ratio, a measure of how much wheat is in storage as a percentage of global demand, would fall to an all-time low of just 18.14 percent.

These numbers seemed to cement traders' worries and were very bullish for wheat futures. The September wheat futures contract rose each day and was up 70.5 cents on the week through midday Thursday, or 13 percent.

As is the case with most crops throughout the summer growing season, the weather is the most closely watched data and traders are likely to keep a close watch on it in order to gauge the wheat crop's condition throughout the rest of the summer.

OIL: Crude oil futures bounced this week after Friday's large sell-off as traders bought back their short positions to book profits and traders continued to worry about domestic crude supplies.

Last week Friday saw a big sell-off in the July crude oil contract as rumors about a possible Turkish invasion into Northern Iraq proved unfounded. Crude had been pushed above $67 a barrel last Thursday on the rumor, but sold off to close at $64.76 on Friday.

Traders began to book profits on Monday, which caused crude to bounce by more than a dollar.

Wednesday's weekly inventory data from the Energy Information Administration caused another run in crude futures as they showed that crude inventories were nearly unchanged from the previous week. Traders had expected the data to show a substantial build in crude inventories.

This report, coupled with continued refinery outages and below-normal gasoline inventories pushed crude higher on Wednesday and well into Thursday with the July crude contract hitting its highest level since May 1 on Thursday.

Walt Breitinger is vice president of commodities at A.G. Edwards and Sons. He can be reached at (219) 738-6460.