US wheat ticks up on weak dollar; corn, soy firm

 

 

US wheat futures edged higher on Monday (March 8) as a weakening dollar prompted investor buying, while corn and soy futures firmed amid concerns over rains delaying fieldwork in the Midwest.

 

Wheat futures - which have been weighed down by burdensome global supplies - will probably come under additional pressure after sliding below the 10-day moving average last week, analysts said.

 

"For wheat, fundamentals are soft and I just can't see any rallies being sustained. There is probably more downside for wheat in the short- to medium-term," said Toby Hassall, an analyst at CWA Global Markets in Sydney.

 

"Wheat is certainly below its recent trading range, which has inspired some technical selling as well," Hassall said. In addition, he said Wheat is moving average convergence/divergence is in the process of crossing, indicating a bearish trend for wheat prices.

 

On Monday, CBOT wheat for May delivery rose 0.3% to US$4.95 a bushel by 0430 GMT. The front-month wheat contract dropped nearly 5% last week, its biggest weekly loss in more than a month.

 

The dollar index of performance against six major currencies, were 0.36% lower. A weaker dollar makes dollar-denominated products, such as US grains, attractive on the world market.

 

Investors eyed weather in the US Midwest, where rains forecast this week may cause flooding in fields that have already been saturated by melting snow.

 

Heavy snowfall across much of the United States this winter has raised the risk of springtime floods and planting delays.

 

Planting in the core corn and soy states, such as Iowa and Illinois, typically does not begin until mid-April, but grain traders are already starting to monitor long-term weather outlooks.

 

CBOT corn for May delivery rose half a% to US$3.77-¼ a bushel and May soy gained 0.3% to US$9.45-¼ per bushel.

 

There is a good chance the May soy contract will drop enough to test the psychologically important US$9-per-bushel mark this week. Traders and analysts point to a bearish flag in the charts for May soy, which closed below the 40-day moving average last week.

 

The weather in Brazil and Argentina, the world's second- and third-largest soy producers and exporters after the US, is forecast to be warm and dry during the next seven days, helping crops to mature.

 

Good crop weather has bolstered corn and soy output in the two countries, although overly wet conditions in recent weeks have delayed harvest at times and raised some disease concerns.