USDA had good news and bad news for the wheat market last week, but in the end the only thing that matter came from Wall Street. Until a semblance of calm returns to the financial world, there's little wheat can do but duck and cover — and drift lower.

Indeed, futures appear firmly locked in the bearish seasonal pattern for both old crop and new. While that doesn't preclude rallies, it certainly makes them more difficult.

USDA's good news came in the form of a lower than expected Sept. 1 grain stocks estimate, despite the bad news, another increase in production. This suggests strong first quarter feed usage, likely of soft red winter wheat, which was priced lower than corn in some areas. As a result, the government is likely to lower its forecast for June 1 carryout in Friday's October supply and demand report. Still, stocks above 500 million bushels are burdensome, especially with world production headed higher.

Hard red winter wheat looks the most favored at the moment, at least for old crop. USDA lower its estimate of production by some 20 million bushels last week, and HRW sales are also strong due to tight supplies of milling quality wheat. That could begin to change thanks to a much bigger than expected crop in Canada, and USDA's increase in spring wheat production here. To read Bryce Knorr's complete weekly wheat review, click HERE.