U.S. grains: Wheat sinks on technical selling, stronger U.S. dollar

Chicago | Reuters — U.S. wheat futures fell more than one per cent on Monday on technical selling and as a stronger dollar created a headwind for U.S. exports of the grain, which are already struggling to compete in the global marketplace.

Corn futures eased on Monday after two straight sessions of gains while soybeans ended mixed amid concerns about harvest delays and the potential for crop damage in the western Midwest.

Traders squared positions ahead of Thursday’s monthly U.S. Department of Agriculture (USDA) crop supply and demand report that is expected to show larger U.S. corn and soybean crops and bigger supplies of corn, soy and wheat.

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The U.S. dollar firmed against a basket of major currencies, making commodities priced in dollars costlier for buyers holding other currencies.

Chicago Board of Trade December wheat futures fell seven cents to $5.14 a bushel, touching a one-week low (all figures US$). The contract failed to breach chart resistance at its 200-day moving average.

December corn shed 1-3/4 cents to $3.66-1/2 a bushel and held near its 50-day moving average for a fifth straight session.

November soybeans were 3/4 cent higher at $8.69-3/4 a bushel after earlier touching a 6-1/2-week high.

Wet weather across key corn and soybean states — including Iowa, Nebraska and Minnesota — stalled the harvesting of both crops, but the rains have boosted soil moisture for hard red winter wheat planting in the central and southern U.S. Plains. Drier weather beginning this weekend is expected to allow farmers to resume harvesting.

“The harvest will eventually get restarted, but the rain is slowing things down today,” said Brian Basting, analyst with Advance Trading. “And there a little more support today in the beans because they are more sensitive to the wet weather.”

Due to the Columbus Day federal holiday, USDA’s weekly harvest progress and crop condition report normally released on Monday afternoon was delayed by a day.

Recent rains in parts of eastern Australia and Argentina — both key Southern Hemisphere grain exporters — added pressure to wheat, along with stiff export competition from Russia, the world’s biggest shipper.

Russian grain continued to undercut U.S. wheat in the global market, although the United States has narrowed the price gap in recent weeks. Meanwhile, wheat traders have speculated that tightening Russian supplies could prompt export curbs.

Russia’s agriculture ministry said on Monday that it would start selling 1.5 million tonnes of stockpiled grain within two or three weeks.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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