After three trading days of heavy losses, CBoT wheat futures will rise more than 1% this morning. Nevertheless, there will probably be the second week in a row today, which is justified by higher estimates for the Russian wheat harvest.
The USDA raised its crop estimate for Russia from 68 million tons to 71 million tons last Wednesday in its WASDE report. Many market participants had the expectation that the estimate would decrease and that export restrictions would occur.
Asian grain mills could buy wheat in Argentina in the coming months, which is a rather rare process. Usually they buy in Australia where a very small crop harvest is expected.
Fund companies, most of which have long positions in their portfolio, sell wheat futures and thus depress prices. Thus they bear the brunt of the price decline. Graphic: Saxo-Trader 
