Chicago | Reuters — U.S. wheat futures fell on Thursday to their lowest in nearly two weeks, turning lower after a weather forecast predicted that temperatures in the U.S. Plains will not be as cold as previously thought, traders said.
Soybeans closed firmer, supported by weakness in the dollar that investors hoped would spur export demand for U.S. supplies. Soybeans peaked at a 3-1/2 month high and briefly broke through the psychologically important $9 a bushel level before closing off session peaks due to a round of farmer sales (all figures US$).
Corn was close to unchanged, with some contracts settling in negative territory while other edged higher. Corn firmed early on the dollar drop but farmer sales as well as the weakness in wheat futures pulled the market from its top.
“Wheat started higher on the day, but midday weather forecast updates warming up the low temperatures forecast for Kansas on Sunday morning crashed the market hard,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital said in a note to clients.
Chicago Board of Trade soft red winter wheat for May delivery ended down 8-1/4 cents at $4.62-1/2 a bushel. K.C. May hard red winter wheat, which tracks the crop grown in the Plains, sank 13 cents to $4.70-3/4 a bushel.
CBOT May soybeans rose 3-1/4 cents to $8.97-3/4 a bushel. CBOT May corn was 1/4 cent higher at $3.68-1/2.
The dollar drop sparked a rally across the commodities sector that spilled over into agricultural futures. Crude oil futures rallied to their highest since Dec. 7.
But by mid-morning, corn, soybeans and wheat had retreated from their highs, with traders saying that ample global supplies of all three commodities limited any potential rallies.
“We are looking at a situation where we are running into some overhead resistance,” said Jim Gerlach, president of A/C trading. “It is nice to have the tailwind from the dollar… but at some point you have got to have some of your own fundamental strength.”
The dollar’s decline came after the Federal Reserve on Wednesday afternoon scaled down its expectations of U.S. rate hikes this year.
Weekly U.S. export sales data on Thursday showed total corn and soybean volumes above market expectations at 1.2 million tonnes, while wheat was within the range of estimates.
Despite the dollar’s drop U.S. wheat exporters continue to face stiff competition from Europe and the Black Sea region.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.