February 7, 2024

 

US wheat, corn, soybeans fall amid dollar strength and weak global demand

Chicago Board of Trade wheat, corn, and soybeans experienced declines, with soybeans reaching 24-month lows, influenced by a strong dollar and sluggish global import demand, dampening market sentiment, Nasdaq reported.

 

The strength of the dollar renders US supplies pricier in export markets, particularly impactful amid diminished demand, notably for wheat.

 

The most active soybean contract on the Chicago Board of Trade fell by 0.2% to US$11.85-3/4 a bushel. Soybeans touched their lowest point since November 2021 at US$11.83-1/4 a bushel earlier, marking a drop below the two-year lows recorded on Friday.

 

Wheat saw a decline of 1.2% to US$5.92-1/2 a bushel, while corn slipped by 0.6% to US$4.39-1/4 a bushel.

 

The dollar surged to eight-week highs against major currencies, and new grain import tenders were scarce, with Iran being the only active market participant.

 

Matt Ammermann, StoneX commodity risk manager, said the stronger dollar is bad news for US export sales of wheat, corn, and soybeans and is generating weakness across grains and soybeans.

 

He said overall Northern Hemisphere weather is not generating major threats to crops, which also adds weakness.

 

In Argentina, rainfall is forecast following concerns over dry conditions, potentially affecting crop outlooks.

 

Ammermann highlighted the dominance of cheap Russian wheat in export markets, with prices starting the week below US$230 a tonne, posing the possibility of further declines.

 

He said as Russia has yet to achieve its required export programme to clear inventories ahead of the new crop, it seems there is a likelihood of fresh lows in Russian wheat prices.

 

Additionally, more grain ships were diverted around South Africa last week following attacks on Red Sea shipping, indicating continued disruptions in global trade routes.

 

-        Nasdaq