Soybean, wheat futures advance as dollar weakens

Soybean, corn and wheat futures advanced in Chicago as the dollar weakened and crude oil gained, boosting demand for the crops from importers and investors.

Soybeans for July delivery rose 0.7 percent to $9.3925 a bushel on the Chicago Board of Trade at 2:24 pm Singapore time. Corn gained 0.4 percent to $3.4975 a bushel and wheat advanced 0.7 percent to $4.4575 a bushel.

The Dollar Index, which tracks the value of the greenback against six major currencies including the yen, declined as much as 0.6 percent, ending four days of gains. A weaker dollar makes US supplies cheaper for holders of other currencies.

“US dollar has weakened, and that has flown through” commodities, said Luke Mathews, an agricultural commodity strategist at Commonwealth Bank of Australia. “Crude oil, a reasonable dictator of agricultural prices at this early stage of the session”, rose, pushing grains and oilseeds higher, he said.

Oil rose for a second day, gaining as much as 2 percent to $74.30 a barrel in New York, after an industry-funded report showed a fall in the country’s crude inventories. Costlier oil raises the appeal of crops used to make biofuels.

Any indication that China was going to purchase more from overseas may help push prices of the grain higher, Mathews said. Still, “it’s not entirely clear if China’s import buying is going to continue,” he said.

Corn imports

China has boosted purchases, after drought cut production and local prices surged. The nation has ordered almost 1 million tons from the United States and will probably buy more, the US Grains Council said on May 24.

China has also sold 5.6 million tons of corn from State stockpiles between April 23 and June 1 to cool domestic prices, according to data compiled by Bloomberg. “The Chinese government is serious about curbing high domestic prices,” Mathews said.

South Korea’s Major Feedmill Group issued a tender to purchase 110,000 tons of corn for arrival in October, according to a tender notice.

Grain planting in Western Australia, the country’s largest wheat-exporting state, will be more than 75 percent complete this week after rains boosted soil moisture, Western Australian Farmers Federation President Mike Norton said on Thursday.

The area sown to wheat in Western Australia was likely to be little changed or slightly lower than last year, Norton said by phone from Perth. A couple of “dry pockets” remained even after last month’s rain, he said.

Western Australia last year produced 8.2 million tons of wheat, accounting for 38 percent of national output of 21.7 million tons, according to the Australian Bureau of Agricultural and Resource Economics. The agency will release state-by-state forecasts for the current winter crops on June 16.

Bloomberg News

Tags: dollar, Soybean, wheat