U.S. grains: Wheat falls on sluggish U.S. export pace; soybeans turn up

Wheat being loaded onto a cargo ship in Vancouver in 2011. (File photo: Reuters/Ben Nelms)

Chicago | Reuters – U.S. wheat futures fell to a one-week low on Friday on concerns about export demand and a strengthening dollar, analysts said.

Corn followed wheat lower on technical selling, but soybeans turned higher on firming U.S. cash markets as well as optimism about U.S.-China talks later this month.

Chicago Board of Trade (CBOT) December wheat futures settled down 5-3/4 cents at $5.02 per bushel after dipping to $5.00-3/4, the contract’s lowest since Nov. 1.

CBOT December corn ended down 3-3/4 cents at $3.69-3/4 a bushel while January soybeans finished up 7-3/4 cents at $8.86-3/4 a bushel.

Wheat fell on concerns that U.S. wheat sales are falling short of the U.S. Department of Agriculture’s (USDA) forecast for exports in the 2018-19 marketing year to reach 1.025 billion bushels, an increase from 901 million bushels a year earlier.

Export commitments so far this year are lagging last year’s pace. Russia, the world’s top wheat supplier, continues to sell grain at competitive prices.

Meanwhile, the dollar index reached a one-week high on Friday and was nearing a 16-month peak, making U.S. grains less attractive to holders of other currencies.

“The function of the market is going to be to keep U.S. wheat price-competitive. We’re getting there; we just can’t run away on the futures prices too much or we will run away from the demand,” said Joe Nussmeier, broker at Frontier Futures.

Soybeans firmed, drawing support from firm cash markets. Cash basis values for soybeans at the U.S. Gulf and the Midwest interior have firmed this week as the U.S. harvest winds down and farmers put their crop into storage.

“Farmers are locking their bins up and holding out for higher prices,” said Terry Reilly, senior analyst with Futures International in Chicago.

Analysts also noted prospects for progress in the U.S. trade dispute with top global soy buyer China.

U.S. President Donald Trump is due to meet with China President Xi Jinping in Buenos Aires, Argentina, at the end of November on the sidelines of a Group of 20 summit to discuss a possible way out of their deepening trade war.

“Traders are getting hopeful that at least a preliminary deal will be struck around the time of the G20 summit,” Reilly said.

The U.S. soybean crop will be smaller than expected, but stocks are forecast to rise sharply as the trade conflict with China weighs heavily on exports, the USDA said Thursday.

For the week, CBOT December wheat fell 6-3/4 cents or 1.3 percent, its fourth weekly decline in the last five weeks.

January soybeans fell 1 cent on the week while December corn fell 1-1/2 cents, or 0.4 percent, ending a two-week advance.

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