WHEAT loses 1.6% on strengthening US dollar; possible rainfalls in Russia 📉USDIDX gains 0.5%

CBOT wheat futures loses almost 1.5% today, dropping to $540 ahead of tomorrow rollover, pressured by strong US dollar. 

• Rains continue to break into the 7-day forecast, with much of the Southern Plains and Eastern half of the US having 1 to 2 inches expected to fall.
• Weekly Crop Progress data showed a total of 91% of the winter wheat planted as of 11/10, with emergence at 76%, both 2 and 3 p.p. above normal.
• Condition ratings were improved by 3% to 44% gd/ex and the Brugler500 index, tracking crop conditions is up 10 points today, rising to 326 - well above normal but not very high.
• Rains are easing the drought for wheat from Nebraska to Texas. According to US meteorologists, ClimatePredict suggests improving weather patterns for parts of Ukraine and Russian wheat. The AO index is slightly down today (negatively correlated with rainfalls, signalling possible rains in Russia)
• According to current commodities projections if La Niña will not form, it would be bearish for longer term wheat prices, most likely.

Russia’s Rusagrotrans expects the Russia's 2025/26 wheat crop acreage to drop to the smallest level since 2018/19 season at 15.4 million hectares (38.1 million acres). However, market react to more short-term drivers, somehow ignoring long term uncertain perspectives for wheat. The stronger dollar hits CBOT, reducing global demand for 'expensive' US wheat.

Long speculative positioning on wheat is extremely low; short positions stopped to fall. Looking at historical positioning, we can assume that overall positioning is quite well-balanced between oversold and overbought conditions levels. Source: XTB Research, Bloomberg Finance L.P. , CFTC Commitment of Traders

Source: xStation5