Wheat creeps higher as dollar slips after elections

PARIS/SYDNEY: Chicago wheat inched higher on Wednesday as a fall in the dollar after the US midterm elections added support following concerns about US crop conditions.

Price movements in grain markets were limited, with corn and soybeans little changed, as investors looked ahead to Thursday's monthly crop forecasts from the US Department of Agriculture (USDA), while also seeking more indications about a possible thawing in trade relations between Washington and Beijing.

The most active wheat futures were up 0.2 percent at $5.13-1/4 a bushel by 1235 GMT. The price benchmark earlier set its highest since Oct. 29 for the second day in a row, at $5.14-3/4.

Wheat had rallied on Tuesday after weekly USDA crop data showed an unexpected decline in US winter wheat crop ratings, while also putting the sowing pace below the average of recent years just as cold weather is forecast for the week ahead.

"Farmers must now work quickly to sow the fields before wintry temperatures make planting impossible," Commerzbank said of US wheat.

A sharp fall in the dollar index on Wednesday also lent some support to wheat and other US grains, making them cheaper for export.

The US currency was pressured by the results from the midterm election, which yielded a politically divided US Congress, dampening expectations for a further fiscal boost for the economy.

A cut to Russia's grain export forecast by the country's farm ministry, to 35 million tonnes from 38 million-39 million previously, underlined the potential for increased demand for US wheat as the 2018/19 season progresses.

The most active CBOT soybean futures ticked up 0.2 percent to $8.85-3/4 a bushel while corn edged down 0.1 percent to $3.72-3/4 a bushel.

Analysts surveyed by Reuters on average expect USDA to lower its US corn and soybean yield estimates although these would still represent bumper crops.

After signs in recent days that the US and Chinese governments are prepared to resume talks over a trade dispute, which has notably stalled lucrative US soybean sales to China, traders were looking for further developments.

The United States and China will hold top-level diplomatic and security talks, which were supposed to be held in Beijing in October, in Washington on Friday, amid moves to try to resolve a damaging trade war.