Wheat:
- Wheat prices have fallen to the 16-month low in anticipation of excellent crops
- Expectations regarding production have been revised up by 2.3 million ton do 142.9 million ton, compared to the July estimates
- Good conditions in France, the UK, Germany, Ukraine, Russia and Poland
- Good export conditions (the weak euro) from Europe threatens US wheat
- Exports from European countries have increased 6% YoY, some market observers suggest the pace is too low compared to a surge in output
Wheat prices in European have declined more compared to US wheat. A move toward this year’s lows seems to be possible. Source: Bloomberg
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Open account Try demo Download mobile app Download mobile appDespite some adverse information concerning wheat US investors continue keeping quite a big long position and have refrained from ramping up shorts. Source: Bloomberg
Wheat prices seem to have some space to continue moving down. Source: xStation5
Cotton:
- Farmers from southern US states stay on alert due to the Dorian hurricane, their fields are not endangered for now
- The biggest attention is paid to the power of wind as the Dorian has gusts still exceeding 200 kph
- Cotlook has revised up its global surplus forecast to 960k ton from 819k ton, the surplus in 2018 was 170k ton
- Cotton prices have fallen in recent months, the worst 5 months for 14 years
- Trade concerns are pivotal in estimating levels of cotton stocks in the US
- Net positioning stays close to the extremely low levels

Net positioning stays close to the extremely low levels. Source: Bloomberg
Cotton prices have fallen in recent 5 months. The current downtrend has begun already in June last year. Source: xStation5
Oil:
- Oil remains under pressure due to concerns about global economic growth
- Starting in September Chinese tariffs (5%) on US oil came into effect
- Brent-WTI spread trades at ca. $4, this is relatively tight spread given what we have seen in the recent months
- Net positioning suggests that bearish sentiment could prevail
- A technical support could be noticed nearby $50 (for WTI)
The Brent-WTI spread does not support so high US exports. Source: Bloomberg
Net positioning in Brent and WTI grades remains at extremely low levels. Source: Bloomberg
Silver:
- Silver prices surged 14% in August driven by strong demand from ETFs
- A divergence between the gold-silver spread and the industrial metals index has begun narrowing
- A similar story in the silver market took place in 2009/2010
- Net positioning in the market remains high, but still off the highs
A divergence between the gold-silver spread and the industrial metals index has begun narrowing. Source: Bloomberg
Net positioning in the market remains high, but still off the highs. Source: Bloomberg
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