Wheat heads for biggest weekly fall since June on dollar rally
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.
MARKETS NEWS
* A gauge of global stocks fell for a third straight session on Thursday while the dollar advanced after U.S. data and comments from Federal Reserve Chair Jerome Powell pointed to a slower path of rate cuts from the central bank. MKTS/GLOB
Reporting by Peter Hobson; Editing by Varun H K
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
