Wheat heads for biggest weekly fall since June on dollar rally
Chicago wheat futures rose slightly on Friday but are set for their biggest weekly drop since June, mainly due to a stronger U.S. dollar and better weather conditions in key growing areas. Soybeans and corn also faced weekly declines as concerns grew over potential reductions in biofuel demand under President Trump’s policies. Additionally, improved crop conditions in Russia, Argentina, and Brazil are expected to ease supply concerns, though U.S. export demand remains robust. Wheat prices are under pressure as global supply improves.
CANBERRA, Nov 15 (Reuters) -Chicago wheat futures rose on Friday but were on track for their biggest weekly fall since June due to pressure from a rapidly strengthening U.S. dollar and improved growing conditions in major producing regions.
Soybean and corn were little changed, also heading for weekly declines as traders worried that biofuel policy changes under incoming U.S. president Donald Trump will reduce domestic demand.
FUNDAMENTALS
* The most-active wheat contract on the Chicago Board of Trade Wv1 was up 0.3% at $5.32 a bushel at 0131 GMT after falling to $5.28 on Thursday, its lowest since Aug. 27.
* Prices were heading for a weekly decline of 7.1%.
* CBOT soybeans Sv1 edged up 0.1% to $9.88-1/2 a bushel but were down 4.2% this week, and corn Cv1 was unchanged at $4.19 a bushel and was down 2.8% for the week.
* The dollar .DXY was close to Thursday’s one-year high after a rally fuelled by rising U.S Treasury yields and expectations that Trump’s policies will raise inflation and require higher interest rates. FRX/
* A higher dollar should suppress demand for U.S. wheat by making it less competitive on global markets, analysts said.
* Not only have rains eased dry conditions in the U.S. Plains and the Black Sea region, but dry skies in soaking Western Europe helped accelerate planting and early yields in Australia suggest its harvest will exceed recent expectations.
* However, some analysts expect the market to tighten over the coming months as Black Sea supply drops. Farmers in top exporter Russia have been selling wheat hand over fist but exports are likely to fall.
* Agricultural consultancy Sovecon trimmed its wheat production forecast for Russia this year but raised its estimate for the 2025 harvest.
* Soybeans and corn are still wrestling with Trump’s nomination of Lee Zeldin as head of the U.S. Environmental Protection Agency. Traders fear Zeldin’s opposition to biofuels could sap demand for feedstocks, with CBOT soyoil BOZ24 also falling sharply this week.
* Improving cropping conditions in Argentina and Brazil suggest supply will be plentiful next year, but demand for U.S. soy and corn has been solid in recent weeks from overseas buyers and local soy crushers.
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