U.S. wheat futures markets continue to trade in a relatively narrow range that is also near the bottom of a longer term-range (see the Chicago wheat chart below).
Wheat markets should eventually break out of this bearish pattern for a number of fundamental reasons. USDA has been very slow to reduce 2018 world wheat production even though virtually every private analyst and several foreign government groups are using smaller numbers. It did make a few minor adjustments in yesterday’s reports, but those are still not enough (in our opinion). The table below compares USDA’s 2017/18 numbers for the major wheat-exporting countries with its forecast and that of WPI for 2018/19.
WPI’s lower production and export numbers for...
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