Wheat stays weak on surging US dollar

FE Team | Published: November 14, 2024 21:49:02

PARIS/CANBERRA, Nov 14 (Reuters): Chicago wheat futures fell for a fourth day on Thursday to trade near a 2-1/2-month low as the US dollar'scontinuing rally weighed on export sentiment, while improving crop prospects in some major producing countries added supply pressure.
Corn and soybean futures were little changed after a three-day drop as traders set the dollar's strength and uncertainty over Chinese demand against a recent upturn in US exports.
The most-active wheat contract on the Chicago Board of Trade was down 0.6 per cent at $5.38 a bushel by 1241 GMT, after falling on Wednesday to $5.36-1/2, its lowest since Aug. 29.
The US dollar set a fresh one-year high, with Wednesday's US inflation data further fuelling expectations of a slowdown in interest rate cuts sparked by Donald Trump's US election win last week.
A higher dollar makes US grain more expensive overseas and traders say competition in wheat markets has been stiff for relatively tepid demand.
"The biggest driver in recent days has been the appreciation of the U.S. dollar," said Andrew Whitelaw at agricultural consultants Episode 3.
"Rains arrived in Kansas, the largest growing state in the U.S., and expectations are that frost damage in Australia is lower than most analysts expected," Whitelaw added.
The return of rain has helped boost low ratings for young wheat plants in the US Plains.
Rain relief has also eased worries about Black Sea crops while in western Europe a drier turn in weather has helped farmers accelerate planting after a rain-delayed start.
European Union farmers are expected to expand planting of wheat, recouping most of the area lost this year following repeated heavy rain, consultancy Strategie Grains said.
The imminent arrival of large southern hemisphere harvests could offset any slowdown in Black Sea exports as supply ebbs there, according to traders. Argentina's Rosario grains exchange cut its wheat crop estimate on Wednesday but still expects the fourth-largest crop in the past 15 years.
CBOT soybeans rose 0.2 per cent to $10.09-3/4 a bushel and corn edged down 0.1 per cent to $4.26-1/4 a bushel.
Corn hit a four-month peak and soybeans a one-month top last week as a reduction to the US Department of Agriculture's harvest forecasts for both crops coupled with a flurry of export sales supported prices.