Wheat rises after dropping to 2-1/2-month low on surging US dollar

CANBERRA: Chicago wheat futures rose on Thursday after plunging to a 2-1/2-month low in the previous session as the US dollar surged to its strongest in a year, making US farm exports less competitive on global markets.

EU wheat prices fall

Corn and soybean futures also steadied after three consecutive days of declines due to the dollar’s pressure, a faltering vegetable oil rally and concerns that a debt swap announced by China last week will fail to stoke its economy.

Fundamentals

• The most-active wheat contract on the Chicago Board of Trade was up 0.5% at $5.43-1/2 a bushel at 0152 GMT after falling to $5.36-1/2, lowest since Aug. 29.

• CBOT soybeans rose 0.4% at $10.11-1/4 a bushel and corn climbed 0.2% to $4.27-1/4 a bushel.

• The dollar rose to its strongest since Nov 2023 after US consumer price data showed progress toward low inflation has slowed, which could result in fewer interest rate cuts by the Federal Reserve next year.

• “Wheat prices are poised for a possible retest of the August lows as rains improve the outlook for both the Black Sea and US Southern Plains and as the markets remove some of the war premium from the market on expectations that the Ukraine war will come to an end,” StoneX analyst Arlan Suderman said.

• The Rosario grains exchange cut its estimate for Argentina’s 2024-25 wheat harvest by 700,000 metric tons to 18.8 million tons due to a drought, but raised its 2024-25 soybean forecast thanks to recent rains.

• Farm office FranceAgriMer lowered forecasts for French 2024-25 soft wheat exports within and outside the European Union, with total shipments now expected to plunge 40% after one of the country’s worst harvests in 40 years.

• Soybeans lost support from a rally in vegetable oils, with CBOT and Dalian soyoil and Malaysian palm oil futures falling sharply this week.

• China’s soybean imports are likely to drop to 98.8 million tons in the marketing year ending Sept 2025 from 109.4 million tons in the prior year, an executive of China National Cereals, Oils and Foodstuffs Corporation (COFCO) said.

• American farmers are worried that President-elect Donald Trump’s sweeping tariffs will curb their China access, but they could also lure companies, hungry for domestic supplies, to build more US crushing plants.