U.S. grains: Soybeans, wheat climb on currency

Corn rises and falls with oil

CBOT May 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago soybean and wheat futures on Thursday posted their biggest gains in two weeks, as a falling U.S. dollar made exports more attractive against South American and Black Sea grain producers.

Corn futures climbed early on strong U.S. export sales and an early jump in crude oil prices, but settled only slightly higher than the prior day as oil slid late in the day.

Grains markets largely shrugged off the monthly U.S. Department of Agriculture (USDA) world agriculture supply and demand estimates (WASDE) report released during Thursday’s session, with many of the agency’s forecasts already largely priced into the market.

The dollar-to-rouble rate fell by 3.2 per cent, strengthening U.S. wheat export prospects, while soybeans benefited from the Brazilian real improving one per cent against the dollar.

“The general support on the grains had more to do with currencies than anything,” said Charlie Sernatinger, global head of grain futures at ED+F MAN Capital Markets. “All of the emerging currencies were strong against the dollar today.”

May soybean futures gained one per cent, the biggest jump since March 23. Soybeans were also strengthened by reports of a smaller Brazilian crop, as Brazil’s CONAB trimmed nearly two million tons off its harvest projection. The U.S. crop still faces record exports from its South American rival.

Wheat futures rose, though gains continued to face headwinds by expectations of a larger U.S. harvest than analysts projected.

The U.S. Agriculture Department reported export sales of old-crop corn in the week ended April 2 at 1,848,900 tonnes, above expectations and a high for the marketing year that began on Sept 1. New-crop sales were a robust 608,800 tonnes.

“It’s kind of disappointing to see us not respond a little better” to the export news, said Rob Hatchett, analyst with Doane Advisory Services. “The demand destruction from ethanol is overshadowing the positives.”

The most-active Chicago Board of Trade (CBOT) soybean contract gained nine cents to $8.63-1/2 per bushel (all figures US$). Its 1.1 per cent weekly increase was the third weekly gain in four weeks.

Corn was 1-3/4 cents higher at $3.31-3/4 a bushel, ending the week up 0.3 per cent. CBOT wheat added 8-1/4 cents to close at $5.56-1/2 a bushel, ending with a 1.3 per cent weekly gain that was its third weekly increase in four weeks.

Corn futures slid recently as the COVID-19 coronavirus disrupted demand for ethanol, a significant market for the grain. U.S. ethanol plants have shuttered as people avoid travel to limit the spread of the virus.

Reporting for Reuters by Christopher Walljasper in Chicago; additional reporting by P.J. Huffstutter and Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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