Wheat drops as dollar strength spurs profit taking; corn, soya weak

CHICAGO: US wheat futures fell on Tuesday on a profit-taking setback, with the benchmark Chicago Board of Trade soft red winter wheat contract sagging 1.6% from the nine-year high it hit on Monday.

Corn and soybean futures also were lower, but the declines were kept in check by signs of strong export demand, traders said.

A video call on Monday between US President Joe Biden and Chinese counterpart Xi Jinping has also spurred hopes that renewed dialogue could bolster Chinese buying of US soybeans.

“The market suspects that China’s importers have and will make hefty purchases of US soybeans in that context,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

A strong dollar, which makes US commodities less attractive to investors looking for a hedge against inflation, added pressure as the greenback rose to a 16-month high.

“This is really the last thing we need for our commodities,” said Brian Hoops, president of Midwest Market Solutions.

At 10:53 a.m. CST (1653 GMT), CBOT December soft red winter wheat futures were down 12-3/4 cents at $8.13-1/2 a bushel, on track for its biggest one-day decline in a month. K.C. hard red winter wheat and MGEX spring wheat contracts also were sharply lower.

CBOT January soybeans were down 3-1/4 cents at $12.54 a bushel and CBOT December corn was off 5-1/2 cents at $5.71 a bushel.

The US Agriculture Department on Tuesday morning said that private exporters reported the sale of 270,000 tonnes of corn to Mexico, the second day in a row a sale was announced to the top buyer of US supplies of the grain.