Chicago | Reuters – Chicago corn, soybean and wheat futures fell on Friday, pressured by profit-taking and a rebound in the U.S. dollar, after the greenback reached a four-year low on Tuesday.
Market participants were adjusting positions at the end of the month and after a volatile trading week that saw record-high precious metal prices in addition to the dollar slide. But on Friday, global stocks declined and rallies in precious metals cooled as the dollar rose.
Grains and oilseed prices had climbed to multi-week highs this week on the back of a weaker dollar, but ample global supply has kept gains in check.
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“It’s just a risk-off environment,” said Karl Setzer, co-founder of Consus Ag Consulting.
“We’ve really pounded the dollar this month,” said Setzer, but he said most of the trade was based on “money flow, positioning and profit-taking.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) wheat Wv1 fell 3-1/2 cents to end at $5.38 a bushel after hitting a new nine-week peak of $5.44-3/4.
CBOT soybeans Sv1 fell 8 cents to $10.64-1/4 a bushel, while corn Cv1 shed 2-1/2 cents to $4.28-1/4 a bushel.
The dollar index =USD continued its recovery on Friday, supported by reports that U.S. President Donald Trump could name on Friday former Federal Reserve Governor Kevin Warsh as the new head of the central bank.
Investors view Warsh as more hawkish on interest rates than other candidates for the post. Market jitters over Trump’s policymaking, including his criticism of the Fed, had fuelled the dollar’s recent slide.
Chicago wheat has also drawn support this week from short-covering by investment funds and bouts of severe cold in wheat belts in the United States and the Black Sea region.
After extreme cold in the U.S. Plains in the past week, traders were monitoring forecasts of deep frosts in Ukraine next week that could cause crop damage.
In Argentina, recent rains improved soil moisture in parts of the country but corn and soy crops still need more rainfall to avoid yield losses, the Buenos Aires Grain Exchange said on Thursday.
The prospect of record soybean production in Brazil, where harvesting is in its early stages, was nonetheless tempering concern about Argentina.
-Additional reporting by Daphne Zhang in Beijing and Gus Trompiz in Paris.
