Wheat dips as US dollar finds its footing
- Soybeans and corn also dipped, and both were set to end the week little changed amid ample supply
Chicago wheat futures fell on Friday as the US dollar regained some ground, even as the greenback’s recent sharp slide and renewed buying interest kept the contract on track for a fourth consecutive weekly gain.
Soybeans and corn also dipped, and both were set to end the week little changed amid ample supply.
The most-active wheat contract on the Chicago Board of Trade (CBOT) wheat had slipped 0.4% to $5.39-1/2 a bushel by 0526 GMT, while CBOT soybeans fell 0.4% to $10.67-1/2 a bushel and corn lost 0.2% to $4.30 a bushel.
Wheat was up 1.8% from last Friday’s close after reaching an eight-week high earlier in the week.
The US dollar rose against a basket of major currencies, helped by a mildly hawkish Federal Reserve.
But the erratic pronouncements of President Donald Trump have driven the currency down sharply in recent weeks, including to a four-year low on Tuesday.
A weaker dollar makes US commodities more competitive on global export markets.
“The US dollar recovering a shade has taken the edge off US grain and oilseed prices,” said Tobin Gorey, founder of agricultural consultants Cornucopia.
“Soft red winter wheat is again struggling to make new highs. Those struggles suggest that the short-covering by investors is petering out.”
Commodity funds hold a large net short position in CBOT wheat but were net buyers on Wednesday and Thursday, traders said.
A recent chill in the US and the expectation of extremely low temperatures in Ukraine next week that could cause crop damage have lent some support to prices.
“But we don’t expect that to translate into a durable upswing,” said a Beijing-based analyst who asked not to be named.
“With global supplies comfortable and competing exporters offering sharp prices, any US weather-led bounce is likely to fade quickly.”
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