Weak Dollar, Strong Exports Lift Wheat Futures

By FeaturesDow Jones Newswires

Wheat futures bounced to the highest close in over three months, helped by a weaker U.S. dollar.

The greenback has had a tumultuous week, falling sharply and briefly rebounding before resuming its downward course. The WSJ Dollar Index, which tracks the dollar against a basket of global currencies, has traded at multiyear lows for much of this week. The index fell 0.35% to 83.14 on Friday.

Continue Reading Below

The dollar's relative weakness against the currencies of rival grain-and-oilseed exporters like Brazil and Russia has boosted U.S. futures for parts of this week, most notably wheat. Analysts said that U.S. wheat exports, which have struggled in the face of tough export competition from the Black Sea region, are particularly susceptible to changes in exchange rates.

March-dated wheat futures rose 1.5% to $4.41 a bushel at the Chicago Board of Trade on Friday, closing at the highest point since early October.

Corn futures followed wheat higher, while soybean contracts fell. CBOT March corn rose 0.4% to $3.56 1/2 a bushel while March soybeans fell 0.7% to $9.85 1/2 a bushel.

Also underpinning Friday's market moves was a string of export sales data released by the U.S. Department of Agriculture.

The USDA said that, in the week ended Jan. 18, exporters sold 1.53 million metric tons of corn for all marketing years combined, above the range of pre-report analyst estimates. The agency reported sales of a further 125,000 metric tons of corn on Friday to what it called unknown destinations for 2017-18.

Weekly wheat sales, at 453,700 tons, also beat expectations. That added to the strength in those markets, observers said. Soybean sales of 759,400 tons fell short of expectations, however. Analysts are particularly concerned about lagging oilseed exports in the face of tough competition from Brazil, which has nabbed an increasing share of Chinese demand this season.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

January 26, 2018 15:29 ET (20:29 GMT)

Continue Reading Below