June 3, 2010

 

US soy, corn and wheat futures climb on weaker dollar

 

 

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

 

Soy for July delivery rose 0.7% to US$9.3925 a bushel on the CBOT at 2:24 p.m. Singapore time. Corn gained 0.4% to US$3.4975 a bushel and wheat advanced 0.7% US$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%, ending four days of gains. A weaker dollar makes US supplies cheaper for holders of other currencies.

 

According to analysts, the US dollar has weakened, noting that crude oil, a reasonable dictator of agricultural prices at this early stage of the session rose, pushing grains and oilseeds higher.

 

Oil rose for a second day, gaining as much as 2% to US$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, analysts said. Still, it remains unclear if China's import buying is going to continue.

 

China has boosted purchases, becoming a net importer for the first time in 14 years, after drought cut production and local prices surged. The nation has ordered almost 1 million tonnes from the US and will probably buy more, the US Grains Council said May 24.

 

China has also sold 5.6 million tonnes of corn from state stockpiles between April 23 and June 1 to cool domestic prices, according to data.

 

Meanwhile, grain planting in Western Australia, the country's largest wheat-exporting state, will be more than 75% complete this week after rains boosted soil moisture, Western Australian Farmers Federation President Mike Norton said.

 

The area sown to wheat in Western Australia was likely to be little changed or slightly lower than last year. A couple of "dry pockets" remained even after last month's rain, analysts said.

 

Western Australia last year produced 8.2 million tonnes of wheat, accounting for 38% of national output of 21.7 million tonnes, 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.