HAMBURG: Chicago wheat fell on Monday as the strong dollar threatened to hamper U.S. exports while expected increases in interest rates raise the prospect of world recession cutting demand.
Continued Ukrainian grain export shipments into world markets also burdened. Soybeans were underpinned by hopes of more Chinese buying and firm soymeal.
Chicago Board of Trade most active wheat fell 1.7% to $8.44-1/4 a bushel at 1206 GMT.
Soybeans rose 0.3% to $14.53 a bushel, corn fell 0.3% to $6.75-1/4 a bushel.
Equities and crude oil fell and the dollar firmed on Monday ahead of central bank meetings in the U.S. and elsewhere which could see borrowing costs rise globally.
“Wheat is seeing downward pressure today from the stronger dollar which will burden U.S. exports at a time Russian wheat is looking cheap in world markets,” said Matt Ammermann, StoneX commodity risk manager. “Fears central banks will increase interest rates and cause a world recession, so cutting demand, is also hitting wheat and the rest of the grains and soy complex today.”
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“Russian wheat is currently looking a very low price and the forecasts today of a larger Russian harvest could mean more supplies are available if exports can take place in the face of the war disruption. Large volumes of Ukrainian corn are still coming onto the world market which is taking demand from other suppliers.”
Some 165 ships with 3.7 million tonnes of agricultural products have left Ukraine in the safe shipping channel. Another ship chartered by the United Nations World Food Programme left Ukraine with around 30,000 tonnes of wheat for Ethiopia.
Russian consultancy IKAR raised its forecast of Russia’s 2022 wheat crop by 2 million tonnes.
“Soybeans are seeing support from hopes of more Chinese import demand and strength in soymeal prices today,” Ammermann said. But soybeans are also burdened by the recession fears today.“
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