Wheat steadies after slide as dollar rally pauses
Wheat futures in Chicago rose 0.5% to $5.32-3/4 a bushel on Friday, but remained near a two-and-a-half-month low due to improving crop conditions and stiff export competition. Market concerns centered on weak demand, political uncertainties around Donald Trump’s presidency, and favorable weather in key growing regions. Soybeans and corn steadied, while market sentiment remained cautious.
PARIS/CANBERRA, Nov 15 (Reuters) -Chicago wheat futures edged up on Friday, helped by a pause in the dollar’s surge, but prices remained near a 2-1/2 month low against a backdrop of improving crop conditions and stiff export competition.
Corn and soybeans also steadied after a four-day drop but uncertainty over the impact of Donald Trump’s upcoming U.S. presidency on trade and biofuel policy hung over the markets, analysts said.
The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.5% at $5.32-3/4 a bushel by 1242 GMT, after falling to $5.28 on Thursday, its lowest since Aug. 27.
Prices were heading for a weekly decline of nearly 7%.
The U.S. dollar index .DXY eased after hitting one-year highs this week as Trump’s election win, U.S. inflation data and comments by Federal Reserve head Jerome Powell fuelled expectations of a slower pace of U.S. interest rate cuts. USD/
The higher dollar will make U.S. crops more expensive compared to crops from other exporters, said Nick Booth at agricultural consultants Mecardo.
“Coupled with Trump’s tariff plans, the risk is that U.S. stocks build, which could have a negative impact on global wheat prices,” he said in a note.
Euronext wheat BL2Z4 futures were also recovering from a 2-1/2 month low, with a drop in the euro against the dollar encouraging talk that European grain was closing the price gap with Russia as supplies there fall.
But traders cautioned that European and U.S. wheat still faced a challenge exporting amid tepid demand and with large Argentina and Australian crops set to reach the market.
“The problem at the moment is not finding sellers but buyers,” a European trader said of wheat. “The market doesn’t look bullish so buyers are staying on the sidelines.”
Better weather conditions have also curbed wheat prices, with the U.S. Plains getting rainfall after a parched start to the growing season and showers also taking the edge off drought in Russian and Ukrainian wheat belts.
Favourable weather in Argentina and Brazil was also capping corn and soybean prices as the markets grapple with potential U.S. policy shifts under Trump.
CBOT soybeans Sv1 rose 1.0% to $9.97 a bushel and corn Cv1 ticked up 0.1% to $4.19-1/2 a bushel.
Trump’s election initially fuelled strength in soyoil on speculation he would counter imports of rival feedstocks for biofuel.
But the risk of a trade standoff with China and the nomination of Lee Zeldin, a critic of biofuel, as head of the U.S. Environmental Protection Agency have raised doubts about both export and domestic demand.
Grain markets will get a gauge of demand later on Friday from weekly U.S. export sales figures and monthly U.S. soybean crush data.
| Prices at 1242 GMT | |||
| Last | Change | Pct Move | |
| CBOT wheat Wv1 | 532.75 | 2.50 | 0.47 |
| CBOT corn Cv1 | 419.50 | 0.50 | 0.12 |
| CBOT soy Sv1 | 997.00 | 9.50 | 0.96 |
| Paris wheat BL2Z4 | 213.25 | 2.50 | 1.19 |
| Paris maize EMAc1 | 208.50 | 1.25 | 0.60 |
| Paris rapeseed COMc1 | 536.00 | 5.50 | 1.04 |
| WTI crude oil CLc1 | 68.50 | -0.20 | -0.29 |
| Euro/dlr EUR= | 1.06 | 0.00 | 0.32 |
| Most active contracts – Wheat, corn and soy UScents/bushel, Paris futures in euros per metric ton | |||
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