MUMBAI: US grains futures edged higher on Monday, lifted by a weaker dollar, gains in crude oil and as adverse weather conditions threatened production in key producing countries.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.9% at $10.79-1/4 a bushel, as of 0343 GMT, after falling 0.74% last week.
“Wheat supplies for exports are only shrinking because of the Ukraine war, exports ban and deteriorating weather conditions,” said a Mumbai-based trader with a global trading house.
“French and US crop numbers are now getting revised downward,” the trader said, adding all these factors support a prolonged rally in wheat.
Growing conditions for wheat and barley crops in France fell sharply for a second straight week as a hot spell exacerbated drought in the European Union’s biggest grain producer.
In the United States, an annual field tour of Kansas last week found the lowest yield potential in the top winter wheat state since 2018. Corn rose 0.32% to $7.81-1/4 a bushel and soybeans edged 0.41% higher to $17.12-1/4 a bushel.
Indonesia’s move to reimpose a domestic sales requirement on palm oil is supporting vegetable oil prices and boosting demand for soybean crushing, said a New-Delhi based trader.
Oil rose nearly 1% in early trade, while the dollar began the week on the back foot, following its first weekly loss in nearly two months, as investors cut bets on more dollar gains from rising US rates.
The grains market is getting support from firm oil prices, which boost demand for the grain-based ethanol, dealers said.
Argentina, the world’s No. 2 corn exporter, could raise its limit for exports of the 2021/22 harvest of the grain to 35 million tonnes, from 30 million tonnes currently.
Kenya has authorised the importation of 540,000 tonnes of maize duty-free until August to forestall a looming shortfall.
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