U.S. grains: Corn, wheat slide to near three-week lows as dollar firms

(Lisa Guenther photo)

Chicago | Reuters –– U.S. wheat and corn futures fell to near three-week lows on Monday as a strong dollar loomed over export demand along with aggressive competition from overseas suppliers, traders said.

Soybeans, which remain underpinned by a tug-of-war for nearby supplies between processors and exporters, ended mostly unchanged after bouncing from session lows. The sell-off in grains coupled with the U.S. Department of Agriculture reporting weekly soy export inspections below a million tonnes for the first time since early October pressured prices earlier in the day.

“Global wheat stocks are ample, global trade is down and the U.S. is just priced out of the market particularly with the strong dollar,” said Dennis Collins, market analyst at Chicago advisory Trilateral.

The dollar was firm on Monday, rising to its highest level in more than a week after Greece late Friday struck a four-month bailout deal with euro zone finance ministers to avoid default.

The strong dollar is weighing on corn demand, traders and analysts said, with the day’s lows hit when the nearby contract broke below its 100-day moving average.

“Export demand has been reasonable but the ethanol grind has been down. So overall demand, while good, hasn’t been extremely robust,” Collins said.

USDA’s outlook conference held in Washington, D.C., last week reminded traders that U.S. grain and oilseeds stocks will be plentiful in the coming year.

Chicago Board of Trade March wheat ended down 4-1/2 cents, or 0.9 per cent, at $5.05-3/4 a bushel after touching $5.03-1/2, its lowest since Feb. 3 (all figures US$).

March corn closed down 6-1/2 cents, or 1.7 per cent, at $3.78-3/4, falling below its 100-day moving average of $3.83-1/4.

March soybeans closed unchanged at $9.99-1/4.

“The U.S. wheat market could break down to below $5 this week as it is facing stiff competition from suppliers in Europe, mainly France,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.

The U.S. wheat market endured a run of disappointing export news last week.

Morocco’s grain agency bought European Union wheat in a tender but received no offers in a parallel tender to buy U.S. durum and soft wheat. Earlier in the week, Egypt’s state grain buyer bought 240,000 tonnes of French and Romanian wheat after scrapping a tender for U.S. wheat only, citing high prices.

— Christine Stebbins is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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