Strong dollar pressures US wheat futures

CHICAGO: Chicago Board of Trade wheat futures fell for the ninth time in 10 sessions on Monday, hitting their lowest level in nearly six weeks, as a firming dollar chilled demand from investors looking for a hedge against inflation.

* High-protein wheat contracts at the Kansas City Board of Trade and MGEX also fell even as concerns mounted about dry soil conditions hurting the 2012 winter wheat crop.

* The dollar strength stemmed from European policymakers' lack of progress on the region's debt crisis, which was raising concerns of a Greek default.

* The strong dollar also makes US wheat relatively more expensive to overseas buyers which could further weaken already light demand for US supplies on the export market.

* Spotty rain showers improved soil moisture conditions in some key growing areas of the parched US Plains but high temperatures could dry areas out again in the coming days.

* Algeria bought 450,000 tonnes of milling wheat, likely of French origin, in a range of $305 to $307 a tonne, traders said. 1:23 PM CDT

Copyright Reuters, 2011