U.S. grains: Wheat mostly lower on technical selling

(Michael Thompson photo courtesy ARS/USDA)

Chicago | Reuters — U.S. wheat and soybean futures were mostly lower on Friday, in a technical selloff and as the U.S. dollar rose to its highest in two months against a basket of currencies.

Prices trimmed losses while corn futures turned higher late in the session, lifted in part by the expiration of November options and investor short covering.

A stronger dollar makes U.S. commodities less attractive in international markets, and corn and wheat already have lost export share to cheaper supplies shipped out of the Black Sea and South America. Another interest rate cut in top global soy buyer China also sparked fears among some commodities investors of reduced imports even as crushers there continued to buy large volumes of soybeans.

“We’re trading the move in the dollar, and that’s affecting commodities across the board today,” said Austin Damiani, analyst at Frontier Futures in Minnesota. “A lot of it, too, is just short-term technical signals.”

Chicago Board of Trade December wheat on Thursday tested psychological support of $5 per bushel but failed to surpass that level (all figures US$). Prices were likely to test this week’s low of $4.83-1/4, Damiani said.

Wheat for December delivery settled 1/4 cent lower at $4.90-1/2 per bushel, after earlier falling to $4.84-3/4.

The Commodity Futures Trading Commission in a weekly report after the close of trading said speculative investors expanded their net short in wheat futures as of Tuesday to 96,635 contracts, the most since May and also switched to a net short position in corn futures.

Storms in the last two days brought much-needed rains to parched areas of the southern U.S. Plains winter wheat belt, helping newly seeded crops to germinate and emerge from the soil, agronomists said.

Heavy rains tied to Hurricane Patricia could also move into the U.S. Midwest net week, delaying the final phases of the corn and soybean harvests, according to the Commodity Weather Group’s David Streit.

CBOT December corn was up 1-1/2 cents to $3.79-3/4 per bushel and CBOT November soybeans down 3-1/4 cents to $8.95-1/2.

“There has been some demand from China and that has supported prices, but on the other hand, supply continues to be very favourable, so traders are weighing up those two currents,” said Phin Ziebell, agribusiness economist at National Australia Bank.

Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Colin Packham in Sydney and Gus Trompiz in Paris.

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