Weaker than expected harvests across the Europe lifted December Chicago Wheat futures on CBOT (WHEAT). Prices are higher more than 1% on a daily basis, extending 'trend-reversal' pattern amid improving technicals and fundamentals. The new market structure has potential to put further pressure on commodity short-sellers. The Commitment of Traders (CoT) report from 27 August signals short covering across bearish-headed speculators.
Managed Money held large bearish bets during risky summer months, but now are partially forced to short coverage. Source: Commitment of Traders
EU, Russia and Black-Sea region will report lower wheat production this year. EU Commission usable wheat production dropped from 121k tons to 116 k tons, expected now. Argus research also lowered France crops to 25.17 million tons this year (23% lower on a yearly basis). Also, Ukraine commented that production can drop 15% from current levels. Probably, US exports will be solid, amid lower supply across the major exporters.
European wheat production will be probably lower this year. Source: Hightower Report
Major exporters ending stocks are down 3 years in a row, while US inventories are still solid. Source: Hightower Report
WHEAT (H1 interval)
Source: xStation5
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