Chicago | Reuters –– U.S. grain and soybean futures reversed early gains to turn lower on Thursday on pressure from a higher dollar, with wheat’s three-session decline of more than six per cent the biggest such slide in nearly two years.
The U.S. dollar, which rose in a rebound from a three-week low, makes goods priced in the greenback less attractive on international markets. Fresh evidence of wheat’s competitive disadvantage came in the U.S. Department of Agriculture’s weekly export sales report showing the smallest wheat exports since June.
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“It really creates a negative atmosphere to sustain (grain) rallies,” Water Street Solutions analyst Arlan Suderman said of the dollar, which is hovering near a 12-year peak against a basket of other currencies.
CBOT May wheat futures finished 19-3/4 cents lower at $4.99-1/4 per bushel, a 10-day low (all figures US$). The contract has lost ground each day since “gapping” higher on the charts to a five-week peak on Monday. Such chart gaps typically are filled and this week’s plunge was the largest since April 2013.
Rains in wheat growing regions in the southern U.S. Plains and Ohio River Valley also weighed on prices. However, the showers in the Plains missed parched areas of Kansas and Oklahoma while precipitation has been so heavy in the Ohio River Valley there could be risks of fungal diseases that damaged last year’s soft red winter wheat crop, meteorologists said.
“The showers in the Plains look better on the radar than in the rain gauge,” Suderman said, adding that USDA was likely to reduce wheat condition ratings in a report on Monday.
USDA next week also will release its annual prospective plantings and quarterly stocks reports, which likely will show U.S. farmers reducing corn sowings and in favor of better earnings in soybeans, a Reuters poll showed.
CBOT May corn fell four cents, to $3.91 per bushel, as investors locked in profits after the contract hit a roughly five-week high earlier in the session.
Soybeans for May delivery were down 4-1/4 cents to $9.74-1/2 per bushel, losing ground for the third straight session amid advancing record soy harvests in South America.
— Michael Hirtzer reports on crop commodity markets for Reuters from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Colin Packham in Sydney.
