In my recent comments on the soybean market I voice some skepticism about the ability of the rally to last much past Monday's USDA report. Seasonal trends aren't supportive, for one thing. For another, the July/November spread was stuck in the mud.

Last week's action went a good ways towards changing my sentiment on the market. Old crop futures gained sharply on new crop, a sign the market at last is becoming concerned about near term supplies. Those worries turned on worsening weather in South America, where hot, dry weather is reducing yield potential. Affected acres —southern Brazil and much of Argentina — received only spotty rains last week, with more of the same forecast for this week. Temperatures in Argentina will briefly top 100 degrees as well.

It's still too early to determine the final impact of the drought, so it's important to remember this is a weather market, one that could break if the weather pattern changes. While the shift towards a La Nina pattern into March supports ongoing concerns, some models are hinting at a change back towards more normal conditions.

To read Bryce Knorr's complete weekly soybean review, click HERE.