(Bloomberg) -- Wheat futures traded in Chicago were set for a second weekly gain, as a series of reports indicated that Europe’s harvest will be smaller.
Strategie Grains cut its forecast for the 2024-2025 EU soft-wheat crop by 5% due to smaller production in France and Germany. France’s agriculture ministry said on Friday that the country’s soft-wheat production is expected to be 25% lower than the five-year average. SovEcon also trimmed its estimate for Russia’s 2024 wheat harvest by 2%.
Egypt is seeking to buy as much as 3.8 million tons of wheat in an unusually big tender on Monday, while Algeria also announced a tender earlier this week. The tenders “underlined the willingness of many importers to purchase at current levels,” CRM analysts said in a note.
Traders are also looking ahead to the US Department of Agriculture’s monthly crop report due Monday. Analysts expect the USDA will raise its US wheat production outlook for the 2024 crop by 0.4% to 2.02 billion bushels, according to a Bloomberg News survey.
“There’s a short covering in front of the USDA report on Monday,” said Marex analyst Charlie Sernatinger. “Plus there’s support because of more talk of a poor French harvest and a lack of availability for export out of France.”
He said there’s typically a rally in September after seasonal lows in the last two weeks of August, and investors are starting to take a few long positions as a test of the trends.
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