Wheat rebounds from 1-week low, stronger dollar caps gains

SINGAPORE: Chicago wheat futures edged higher on Monday, snapping three sessions of losses, on expectations of higher demand for US supplies though a stronger dollar kept a lid on the market.

Corn slid for a second session while soybeans were little changed with focus on US-China trade talks later this month.

The most active wheat contract on the Chicago Board Of Trade gained 0.6 percent to $5.04-3/4 a bushel, as of 1139 GMT, having closed down 1.1 percent on Friday when prices slid to $5.01 a bushel - the lowest since Nov. 1.

Corn rose 0.2 percent to $3.70-1/2 a bushel, having closed down 1 percent in the previous session and soybeans were down 0.4 percent at $8.83 a bushel, having firmed 0.9 percent on Friday.

The dollar built on last week's gains and rose towards a 16-month high on Monday as traders expect the US Federal Reserve to keep tightening monetary policy.

A stronger dollar makes greenback-priced products such as US grains more expensive for importers holding other currencies.

The wheat market has been under pressure on concerns that US exports are falling short of the US Department of Agriculture's (USDA) forecast as Russia, the world's top supplier, continues to sell grain at competitive prices.

But the market expects US exports to pick up next year after Russia and the other exporters in the Black Sea region run out of surpluses.

"Wheat is rebounding as we expect strong demand for US supplies in the first half of next year as the Black Sea region and Australia will have less to sell. This is likely to support wheat prices," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.

The firm dollar weighed on soybeans but support came from prospects for progress in the US trade talks with top global soybean buyer China.

US President Donald Trump is due to meet with China President Xi Jinping in Buenos Aires, Argentina, at the end of November on the sidelines of a Group of 20 summit to discuss a possible way out of their deepening trade war.

Large speculators trimmed their net short position in CBOT corn futures in the week to Nov. 6, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat as well as their net short position in soybeans.