“The general trend in the market and the projection reports point higher production and sales pressure. However the possibility of the new production projections is positive may cause increase in the purchases. In the long term, it is seen highly possible that the prices would decrease as these production amounts continue.” There were response purchases and efforts for forming support in the wheat prices. With the announcements of the production projections for the new season, wheat price has depreciated about 29% by decreasing rapidly since May. It was seen that response purchases increased in early August. However, this increase was not permanent and it entered into a horizontal channel. Wheat price succeeded to hold in the region which was tested again and again since July. Despite that wheat production projection showed an unexpected increase compared to the previous month, the response of the market was not harsh. Although sales were realized after the first announcements, there was a movement in the horizontal band by recovering. Yet, the production is expected to surpass the amount realized last year. Also the wheat stocks increased to record levels as well. Strong supply side in the wheat market causes downward price expectations. However the market ignored that for now. We see that some short term positions are closed after the 29% decrease experienced rapidly. Besides, the increase in the tension between Ukraine and Russia caused concerns in the wheat market. Therefore, there was a more balanced market in August. WHEAT IMPORT OF TURKEY MAY EXCEED 5 MILLION TONS Wheat harvest still continues in Turkey. Local wheat prices had a fluctuating course during the month but they were almost at the same levels. Regional differences are effective on this fluctuating course. While the loss is expected to be higher especially in Central Anatolia and Eastern Anatolia regions, there is high production amount in the Marmara region. However, it is inevitable that there will be decline in the wheat yield of Turkey. While it is stated that the loss in the production due to the drought may exceed 20%, local prices are seen to be higher than the global prices. Turkey is a wheat importer. Turkey’s wheat import average in the last five years is at 3,7 million tons level. Wheat import may exceed 5 million tons this year due to the drought. On the side of exports, the country has a disadvantageous position. THE HIGHEST INCREASE ON MONTHLY BASIS: 10 MILLION TONS According to the projection report released by U.S. Department of Agriculture; the production increased 10,92 million tons compared to the previous month. Thus the production amount reached to 716,09 million tons. The monthly increase in the projections can be the highest increase so far. There is criticism for the report’s margin of error due to the increase with this amount. It is not considered as normal to have this much change in the projections in a month. Increasing to 716,09 million tons, the production projection points an increase of 2,02 million tons compared to the previous year. However; when it is considered that last year was one of the production years with record, it is understood well that the production projection for the new season points such a high increase. Together with the increase in the production, another increase is also expected in the end period stocks. End period stocks will increase to 192,96 million tons with an increase of 3,42 million tons. In other words, 27% of the world wheat production is reserved for stocks. Russia is the country causing high amount of deviation in production projections. Wheat production in Russia showed an increase of 6 million tons thanks to the favorable weather conditions. Increasing to 59 million tons, wheat production projection in Russia causes increase expectation in the exports. When considered from this point of view, it is highly possible to see increase in the wheat import of Turkey from Russia this year. There is the expectation that the wheat supply in the global markets will increase with the increase in the wheat export of Russia. Another country for which an increase is expected in the production compared to the previous month is China. Wheat production projection in China increased 2 million tons compared to the previous month. Increase in the production in China would cause wheat import to decrease. When it is considered that China is an important wheat importer, the country is projected to have adverse effect on the global demand. Lastly, U.S.’s wheat production projection increased 1,03 million tons compared to the previous month. With the support of the favorable weather conditions in Russia, China and U.S. for wheat production, 10,92 million-ton increase is expected in the world production projections. We took the production side into consideration all the time; however consumption projections increased 6,87 million tons compared to the previous month despite it is not as much as the production increase. There is 740 thousand-ton increase compared to the last year. There is increasing consumption in the European Region. Additionally; it is seen that wheat consumption increased in North Africa, India, Ukraine and Russia. INCREASE PROJECTION OF IGC IS 3 MILLION TONS International Grain Commission (IGC) increased its world wheat production projection 3 million tons compared to the previous month. Thus, global wheat production will increase to 702 million tons. There is 8 million-ton decrease in the production amount compare to the last year. IGC’s production projections contradict with the projections of USDA. When it is taken into consideration that there 10 days between the releases of the two institutions, it is not so easy to explain a difference with that amount. Even though there are different amounts on the production side, the end period stocks are almost at the same level. IGC increased its end period stock projection to 193 million tons. According to the report; the production increase in Russia and Ukraine draws attention. It is projected that world production will decrease 1% on annual basis with the expected decrease in the North Africa. There is increasing consumption demand in South Asia, Africa and the European Region. As a result of that, the increase on annual basis is expected to be 8 million tons. One of the main differences between IGC and USDA can be shown as this increase in the consumption. SALES PRESSURE MAY INCREASE As a result; when the projection averages of the two institutions making global projections in the grain markets, world wheat production average is expected to be 709,04 million tons. This amount points 3 million tons of increase compared to the previous month. The increase trend in the monthly projections continues. Each month has been revised upwardly since the projections for the new season were announced. It can be met normally that the sales pressure in the futures transactions increases after the increase in the production projections. December futures wheat price in Chicago Mercantile Exchange started to recover in the horizontal band after the harsh decrease started in May. It managed to hold despite the adverse production projections. This situation increases the expectations that wheat has gathered strength. Having increase before the new projection report, wheat price returned to the lower band again with the increasing production projections. At this level, the struggle of forming balance again is seen. 545 cent/bushel level is accepted as the short term reference point. Strengthening trend in the wheat transactions would continue as it remains above this level. If this level decreases, sales may accelerate. 580 and then 600 cent/bushel level become prominent in the upward movements. The general trend in the market and the projection reports point higher production and sales pressure. However the possibility of the new production projections is positive may cause increase in the purchases. In the long term, it is seen highly possible that the prices would decrease as these production amounts continue. The support point of the long term trend is at 425 cent/bushel level. If the production and consumption expectations still continue to remain as they are, there can be a movement to the 425 cent/bushel levels. Therefore, investors had better take into consideration that upward movements will remain as a response movement for now.