Chicago | Reuters — U.S. grain futures slumped on Friday under pressure from the rising U.S. dollar, with corn futures approaching a two-month low.
“Everybody’s looking at the dollar,” said Jim Gerlach, president of A/C Trading in Indiana. “That’s the only story right now.”
The dollar jumped more than one per cent to a seven-month high after stronger-than-expected jobs data left investors expecting the first rise in U.S. interest rates in almost a decade next month.
A stronger dollar makes U.S. farm products less attractive on the global market, and U.S. grain exports already face competition because other countries have large supplies.
Chicago Board of Trade December corn ended down 0.4 per cent at $3.73 a bushel after falling to $3.70, the lowest price for a front-month contract since Sept. 11 (all figures US$). December wheat slipped 0.5 per cent at $5.23-1/4.
November soybeans rose 0.4 per cent to $8.71-1/4 after dropping to $8.63-1/4, the lowest price for a front-month contract since Sept. 24.
Slow export demand and large U.S. harvests are expected to drive the U.S. Department of Agriculture to raise its estimates for domestic corn, soybean and wheat ending stocks in a monthly report due out Tuesday.
Traders are “afraid of the double whammy, where they get a little production increase and demand decrease” in the USDA reports next week, Gerlach said.
On Thursday, USDA reported wheat export sales for 2015-16 in the week to Oct. 29 at 84,600 tonnes, well below a range of trade estimates for 300,000 to 500,000 tonnes and the lowest weekly total since Sept. 24.
Exports have been weak as U.S. farmers are wrapping up large corn and soybean harvests, following favourable growing weather this year.
On Monday USDA, in a weekly crop report, will likely estimate the corn harvest is about 92 to 94 per cent complete and soybeans are more than 95 percent harvested, said Rich Feltes, head of market insights for broker RJ O’Brien.
— Tom Polansek reports on agriculture and ag futures for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.