U.S. Soy, Corn Up 1 pct as Dollar Rally Fades
PARIS/SINGAPORE - Chicago soybean and corn futures rose about 1 percent on Tuesday, recovering some of their biggest single-day losses in months in the previous session, as a weaker dollar prompted renewed buying.
Wheat futures in Chicago similarly bounced, pulling Euronext wheat in their wake, after losing ground on Monday on the dollar and ample global supplies of the grain.
The dollar fell broadly after traders took comments from Russia that the world needs new reserve currencies as a signal it may be looking to cut the share of U.S. assets in its currency portfolio.
The easing dollar also supported gains for crude oil, which influences grains because of their use in making biofuels.
A weak dollar makes U.S. commodities cheaper for operators holding other currencies and is often taken as a buying signal, while a dollar rise tends to trigger selling of commodities.
“It’s still the dollar that’s setting the tone,” one European trader said.
A surge in the dollar, coupled with better weather prospects in the U.S. Midwest, sent front-month soybeans tumbling 3.9 percent on Monday, the biggest one-day drop in four months, and corn down 4.6 percent, the largest fall in five months.
The heavy losses on the Chicago Board of Trade followed big gains in recent weeks that took grains to multi-month highs.
“We paid for an excessive rise with an exaggerated fall,” another European trader said.
Weather still a factor in n. hemisphere
Chicago Board of Trade July soybeans were up 1.42 percent to $12.14 a bushel by 1116 GMT, with operators pointing to continuing support from tight old-crop supplies. July corn rose 0.99 percent to $4.10 a bushel.
On wheat markets, CBOT July wheat rose 1.09 percent to $5.81-1/2, while benchmark November wheat on Euronext added 1.03 percent to 147.50 euros a tonne, pulling away from a support zone at 143-144 euros tested on Monday.
While exchange rates have dominated commodities this week, operators said weather conditions remained a focus for the grain markets as northern hemisphere crops approach harvest time.
Forecasts that the heart of the U.S. crop belt will warm up this week, giving young plants a much-needed boost after a wet spring, contributed to Monday’s slide in corn and soybeans.
Some traders said weather would remain a wild card right up until the harvests, whereas others argued the risk of a major weather incident was falling as the season advanced.
In the southern hemisphere, major wheat exporter Australia is on track to produce the biggest crop in five years.
The Australian Bureau of Agricultural and Resource Economics (ABARE) said output may rise 2.7 percent to 21.97 million tonnes this year as improved yields offset marginally lower planting.
Wheat futures in Chicago similarly bounced, pulling Euronext wheat in their wake, after losing ground on Monday on the dollar and ample global supplies of the grain.
The dollar fell broadly after traders took comments from Russia that the world needs new reserve currencies as a signal it may be looking to cut the share of U.S. assets in its currency portfolio.
The easing dollar also supported gains for crude oil, which influences grains because of their use in making biofuels.
A weak dollar makes U.S. commodities cheaper for operators holding other currencies and is often taken as a buying signal, while a dollar rise tends to trigger selling of commodities.
“It’s still the dollar that’s setting the tone,” one European trader said.
A surge in the dollar, coupled with better weather prospects in the U.S. Midwest, sent front-month soybeans tumbling 3.9 percent on Monday, the biggest one-day drop in four months, and corn down 4.6 percent, the largest fall in five months.
The heavy losses on the Chicago Board of Trade followed big gains in recent weeks that took grains to multi-month highs.
“We paid for an excessive rise with an exaggerated fall,” another European trader said.
Weather still a factor in n. hemisphere
Chicago Board of Trade July soybeans were up 1.42 percent to $12.14 a bushel by 1116 GMT, with operators pointing to continuing support from tight old-crop supplies. July corn rose 0.99 percent to $4.10 a bushel.
On wheat markets, CBOT July wheat rose 1.09 percent to $5.81-1/2, while benchmark November wheat on Euronext added 1.03 percent to 147.50 euros a tonne, pulling away from a support zone at 143-144 euros tested on Monday.
While exchange rates have dominated commodities this week, operators said weather conditions remained a focus for the grain markets as northern hemisphere crops approach harvest time.
Forecasts that the heart of the U.S. crop belt will warm up this week, giving young plants a much-needed boost after a wet spring, contributed to Monday’s slide in corn and soybeans.
Some traders said weather would remain a wild card right up until the harvests, whereas others argued the risk of a major weather incident was falling as the season advanced.
In the southern hemisphere, major wheat exporter Australia is on track to produce the biggest crop in five years.
The Australian Bureau of Agricultural and Resource Economics (ABARE) said output may rise 2.7 percent to 21.97 million tonnes this year as improved yields offset marginally lower planting.
quoted from: Khaleej Times
