U.S. grains: Soybeans fall as dollar rises on jobs data

Chicago | Reuters — U.S. soybeans ended lower on Friday as a jump in the dollar on strong employment data spurred technical selling, traders said.

Additionally, forecasts of record soybean production in South America hung over prices.

Corn and wheat closed slightly firmer on a pre-weekend short covering bounce. Wheat was underpinned by a pickup in global demand this week after prices fell to four-month lows and a deterioration in the dormant U.S. winter wheat crop after a dry January.

Traders said the grain markets were marking time between generally favourable crop conditions in South America and the start of the Northern Hemisphere growing season. They also were waiting for the U.S. Department of Agriculture to update its world and domestic crop supply and demand forecasts on Feb. 10.

“With that lull, we are more sensitive to the outside volatility in the crude oil and dollar markets. That’s certainly true this week,” said Rich Feltes, vice-president of commodity research at brokerage R.J. O’Brien.

The U.S. dollar climbed against major currencies on Friday after government data showed U.S. jobs growth rose and wages rebounded strongly in January, bolstering views that the Federal Reserve will hike interest rates by mid-year.

While the bounce in the dollar loomed over Chicago Board of Trade corn, soybeans and wheat on Friday, all three closed higher on the week.

Chicago Board of Trade March soybeans closed down 7-3/4 cents, or 0.8 per cent, at $9.73-1/2 on Friday (all figures US$). CBOT March corn ended up 1/2 cent, or 0.1 percent at $3.85-3/4, bouncing in the last few minutes of trade.

“More choppy, rangebound trade is expected in corn until we get closer to spring planting weather conditions,” said Shawn McCambridge, a grains analyst with Jefferies Bache.

March wheat closed up 1-1/4 cents, or 0.2 per cent, at $5.27 — its first weekly rise in seven weeks, as hopes of an export breakthrough in Egypt underpinned prices.

Egypt could hold tenders for U.S. wheat in order to make use of a $100 million credit line from the U.S., the country’s supplies minister said Thursday.

The news followed a run of tenders by importing countries this week.

“Exports steering away from a very weak path are good news, but are more support than a reason for an extended rally,” Tobin Gorey, director of agricultural strategy for Commonwealth Bank of Australia, said in a note to clients.

— Christine Stebbins is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.