Chicago-listed CBOT wheat (WHEAT) is trading down more than 1% today, and is not reacting to news from Russia's SovEcon, which lowered its preliminary wheat crop estimate for 2025. Declines continue to be spurred by a strong U.S. dollar and good weather for crops in the key Midwest region of the U.S., where bears were also not spooked by forecasts of rain in the U.S. Southwest.
- The latest Commitment of Traders report, published on October 15, indicated a still bearish position on the part of large speculators, while at the same time a large short position on the part of Commercials (companies hedging against price declines). This suggests that both speculators and producers hedging supplies are expecting lower wheat prices. On the other hand, however, the short position on the part of Managed Money (speculators) in CoT reports has been declining since August
- Sovecon estimates 80.1 million tn of harvest in 2025, compared to 81.5 million tn this year (the least since the 2021-2022 season) and a 5-year average of 88.1 million tn. The reason for the lower estimates is the drought, which has reduced both planting acreage and yields. According to Sovecon, winter wheat will enter the cold season in very poor shape, despite stronger rainfall in some supply-relevant regions of Russia. Drought could cause yields to fall to their lowest levels since 2019, suggesting a problem with global wheat stocks, which are already relatively low
- Consultancy IKAR predicts wheat production in Russia, in 2024, at 81 to 85 million tons after recent rains, but these forecasts are not supported by Sovecon concerned about the poor condition of winter wheat, which could surprise with much lower yields. Significantly, it is the large supply of Russian wheat in 2022-2023 that has been a major factor, depressing global wheat prices.
- S&P estimates a 16% drop in Ukraine's wheat exports this year, despite the Black Sea trade agreement in place and record demand for Ukrainian grains from EU countries as well as Bangladesh and Vietnam, among others. Ukraine estimates a 22.4 million-ton harvest for the current season, down 600,000 tons year-on-year.
WHEAT (H1)
Looking at the chart of WHEAT on the H1 interval, we see that prices have again settled below three, key moving averages indicating an overheating of the uptrend and a possible test of the area around the 61.8 Fibonacci elimination of the upward wave initiated after the last roll-off. The market has not accepted levels above $611.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile appSource: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
