Weak US dollar lifts wheat, but Black Sea export hopes cap gains
- The most-traded wheat contract on the Chicago Board of Trade (CBOT) was up 0.5% at $6.01-3/4 a bushel
Chicago wheat futures edged up as a weaker US dollar boosted competitiveness, yet strong Black Sea export expectations kept prices near four-month lows. Corn and soybeans also saw gains.
- Weaker US dollar's effect on agricultural export competitiveness.
- Black Sea grain export outlook and potential peace talks.
- Upcoming US corn and soybean harvest estimates.
CANBERRA: Chicago wheat futures rose on Thursday as a weaker US dollar made US crops more competitive on global markets, although expectations of stronger Black Sea exports kept prices near four-month lows.
Corn and soybean futures also gained after reaching multi-month lows in the previous session.
The most-traded wheat contract on the Chicago Board of Trade (CBOT) was up 0.5% at $6.01-3/4 a bushel at 0148 GMT. Corn rose 0.4% to $4.46 a bushel and soybeans were up 0.1% at $12.03-1/2 a bushel.
From highs in early September, CBOT wheat has fallen about 25%, while corn has slipped roughly 20% and soybeans around 10%.
Prices found support on Thursday from a weakening US dollar, which extended its decline after Democrats secured control of both chambers of Congress in the midterm elections, boosting the appeal of US agricultural exports.
Wheat prices surged earlier this year after Russian and Ukrainian exports through the Black Sea were disrupted, but alternative shipping routes have helped avert the supply shortages many traders had feared.
Both countries are shipping increasing amounts of grain via alternative routes and have confirmed participation in three-way peace talks with the US in Abu Dhabi on November 10-11, raising the prospect of a reopening of Black Sea shipping lanes.
Commonwealth Bank analyst Dennis Voznesenski said continued large exports from Russia and Ukraine, hopes for a Black Sea agreement and Russia’s recent issuance of permits for vessels to leave the Sea of Azov were all weighing on wheat prices.
But the market is unlikely to move much lower without concrete developments on reopening Black Sea ports, he said.
“Prices are stuck in limbo at the moment,” Voznesenski said. In other crops, commodity brokerage StoneX raised its estimates for the US corn and soybean harvests on Tuesday.
Traders are awaiting updated US Department of Agriculture harvest estimates next week.
The US soybean crop is expected to be the biggest on record and the corn crop the second-biggest. Rain has interrupted harvests in some parts of the US, slowing some cash sales of crops by farmers, according to traders.
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