U.S. grains reach multi-week highs on weak dollar, export sales

U.S. grain futures rose to multi-week highs on Friday as weakness in the U.S. dollar gave commodities a boost and weekly export sales topped expectations.

Corn futures touched a two-week intraday high after the U.S. Department of Agriculture said U.S. export sales last week were 958,600 tonnes, well above analysts’ estimates for 300,000 to 450,000 tonnes.

Wheat export sales of 657,500 tonnes were above estimates for 200,000 to 400,000 tonnes, and soybean sales of 543,600 tonnes were within expectations.

Weakness in the dollar helped support gains because a declining dollar makes commodities priced in dollars more affordable for buyers using other currencies.

"The dollar’s getting pounded," said Jason Britt, president of Central States Commodities. "The grain markets are obviously getting some pretty decent news."

January soybeans set a one-week high and closed up 0.8 per cent to $14.18-3/4 a bushel at the Chicago Board of Trade (all figures US$).

December wheat gained 0.3 per cent to $8.47-3/4 a bushel, while December corn jumped 0.6 per cent to $7.45-1/2 a bushel.

Trading hours were abbreviated following the Thanksgiving holiday Thursday in the United States, the world’s top grain exporter.

U.S. traders have been keeping a close eye on demand because they already have a good understanding of supplies following the early U.S. harvest this autumn.

Ukraine nears limit

Traders were waiting for an improvement in demand for U.S. wheat since supplies have tightened in other exporting countries like Australia and Ukraine.

Demand was "surprisingly good for corn and wheat," said Brian Hoops, president of Midwest Market Solutions. "We definitely needed something to give us a boost and finally we have seen that."

Ukraine’s grain traders are ready to halt milling wheat exports on an informal basis, as they approach a critical limit, in order to protect the domestic market after a poor harvest, the agriculture ministry said on Friday.

Exports of milling wheat have reached 5.2 million tonnes so far this season, said the ministry, which previously agreed to allow traders to ship abroad no more than 5.5 million tonnes.

Agriculture Minister Mykola Prysyazhnyuk held a meeting with traders on Friday at which they expressed readiness to curtail milling wheat exports, the ministry said in a statement.

Demand also has stayed solid for soybean oil, as private exporters struck a deal to sell 20,000 tonnes of U.S. soybean oil to unknown destination for delivery during the 2012-13 marketing year, the U.S. Agriculture Department said on Friday.

— Tom Polansek covers agriculture and the CBOT for Reuters from Chicago.

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