As expectations towards next year remain unchanged, no drastic variation in the wheat transactions is expected. It is estimated that the wheat market which has increased in value since 2006 will gradually return to its old price dynamics.  The incoming positive projection reports may lead the purchases to increase. But as the high production estimations in the long-term still continue to prevail, it seems that the decrease in prices is a high possibility.     The month of October has become the month that an increase in the wheat market has been observed after a long while. With the production estimations still continue to increase, we have witnessed decline in the year-end stocks. The rainy weather in the USA has also played a great part in this. Thus, the downtrend ongoing for a long time has come to a halt. The wheat price has inclined up to the 539 cents/bushel level. It is not possible to explain this inclination only with the decrease in the stocks and the increasing rain fall. It is clear that some of the short positions reaching to record high levels have come to an end. With the winter months in the horizon, there is also an expectation towards the increase of the prices in the Black Sea region. But the thing to take into consideration is the present existence of high production expectations. Nevertheless, in World Trade Organization’s last report on food, it is mentioned that the wheat stocks are to reach the highest levels since 2003. That is, there is virtually not much change in the wheat market in terms of production. The demands are known to be limited. In this sense, it is likely that the growth will remain as response purchases and the short positions will come to an end. After seeing the 470 cents/bushel level at the beginning of October, an upward movement has been observed. With the initiation of the purchases 439 cents/bushel level was reached. In the meanwhile, the rise in the value of the US Dollars influences the wheat prices negatively. This rise in value was also effective in the downtrend. The response purchases observed with the other currencies have also supported the wheat in increasing in value. However, the circumstances seem to be against the wheat because the upward trend of the US Dollars’ is expected to continue. THE WHEAT PRICES MAINTAIN THE STRONG PROGRESS In the meantime, the stable run in turkey still remains. The wheat prices continue to increase worldwide, whereas the prices in turkey have remained high. Because of the loss in production mainly due to the drought, the wheat prices are observed to have stayed strong. The tenders of the Turkish Grain Board (TMO) are still on-going. The stocks are increasing with the new purchases. This strong run is expected to prevail in the winter months. However, the Turkish Grain Board (TMO) has not supplied too much wheat to the market. This is another factor contributing the prices to remain high. The regional production differences play a great role in the wheat prices in Turkey. Whereas the production levels stay high in the Marmara region, the drought has severely affected the Inner Anatolia and the eastern regions. It is stated that the rate of the loss incurred due to drought could be more than 20%. Because of this loss, the wheat importation may exceed 5 million tons this year. 27 % OF THE WHEAT PRODUCTION WILL BECOME STOCKS According to the estimation report released by the United States Department of Agriculture (USDA), the amount of production has shown an increase of 1.17 million tons when compared with the last month. Thus the production figure reached to 721.12 million tons. The increase when compared with 2012 is 62.96 million tons. This figure on its own is more than the most of the countries’ annual production amounts. The decrease in prices under such circumstances should be considered normal. United States Department of Agriculture has increased their estimation every month since the start of the season. We have seen that the increase in the estimations have been particularly influenced by Russia, Ukraine and Europe. The production in Europe region has almost influenced the estimations in October on its own. The wheat production estimation in Europe has reached 153.98 million tons with an increase of 3.01 million tons. Whereas the wheat production estimations remain unchanged or show a decline, a significant growth in production is anticipated in Europe. The expectations of increase in the production in the European region cause the selling pressure over the prices to increase. Therefore, the wheat prices in Europe can be expected to stay low throughout the year. Another significant development in the estimations of USDA is the decrease in the year-end stocks. With a 3.79 million tons decrease, the stocks will decline to 192.59 million tons. Thus, an expectation of a decrease in the stocks has formed for the first time despite the growing production estimations. However the stock levels are still too high. 27% of the global wheat production will become year-end stocks. This figure is still high. The decrease in the stocks is influenced by the decrease in production in Canada, Middle East and North Africa. An increase in demands in Middle East and North Africa is anticipated whereas a decrease in production in Canada is present. On the demand side, North Africa is still in the lead. The importation expectations have been increased to an amount of 24.35 million tons. An increase in the Middle East and Southeast Asia sourced importation is expected as well. No significant change in the demands of other countries is expected so as to influence the prices. USA and European countries stand out on the importation side. The increase in production in these countries is expected to increase the exportation. But in terms of consumption, China is the leading country. The wheat consumption of China is expected to reach 124 million tons. Thus, China on its own is to consume 17% of the global wheat production. For this reason, the recession in the China economy is to have an adverse effect on the global wheat demands. GLOBAL WHEAT PRODUCTION IS 717 MILLION TONS International Grains Council (IGC) has increased its estimation regarding the global wheat production by 4 million tons when compared with the last month’s estimations. According to IGC, the global wheat production will reach 717 million tons. Thus, the production estimations of USDA and IGC have considerably come closer to each other. Despite the estimation of increase in production, the year-end stocks are expected to remain at the same level with 195 million tons. The total consumption will reach 959 million tons according to the estimations of IGC. 390 THOUSAND INCREASE FROM LAST MONTH According to the estimations of the World Food and Agriculture Organization (FAO) global wheat production is expected to be 718.5 million tons. Europe and Russia play an important role in this increase. And a 10 % decrease in production is anticipated in Turkey. According to the FAO report, year-end stocks will reach 192.4 million tons. In conclusion, when the average of the estimations of the three institutions which provide global estimation reports for the grain market, the global wheat production is expected to be an average of 718.87 million tons. Thus it indicates an increase of 390 thousand tons when compared with the last month. Based on their estimations, an increase in production is expected by all of the three institutions. But different from their recent estimations, the projection in the year-end stocks differs. We may experience back and forth fluctuations in the prices between production and year-end stocks throughout the year. 15% INCREASE IN PRICES The December dated price of wheat in the Chicago Mercantile Exchange has passed a month with an upward trend for the first time since May. The prices have gone up to the level of 539 cents/bushel level following the purchases taking place particularly after having seen the level of 470 cents/bushel. In other words, an increase of approximately 15% took place in October. But for how long the prices will remain at that level is another question. With the continuation of high production estimations in particular, a selling pressure will be formed on the prices. As the expectations towards the next year remain unchanged, no drastic variation is anticipated in the wheat transactions. We need to consider the current increase as response purchases. It is estimated that the wheat market which has increased in value since 2006 will gradually return to its old price dynamics. The incoming positive projection reports may lead the purchases to increase. But as the high production estimations in the long-term still continue to prevail, it seems that the decrease in prices is a high possibility.