BLBG: Soy, Wheat Climb as Weaker Dollar Boosts Appeal of U.S. Crops
By Luzi Ann Javier
April 12 (Bloomberg) -- Soybeans, corn and wheat rallied as the dollar weakened, boosting the appeal of U.S. crops to importers and investors.
Soybeans for May delivery rose as much as 1 percent to $9.6125 a bushel on the Chicago Board of Trade, and were at $9.58 at 10:37 a.m. Singapore time. Corn for July delivery advanced as much as 1.1 percent to $3.6125 a bushel, while wheat gained as much as 1 percent to $4.8425 a bushel.
The Dollar Index, which tracks the value of the currency against the counterparts of six major trading partners, fell as much as 1.2 percent after European governments offered Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market rates in a bid to stem its fiscal crisis.
“News from Europe has weakened the dollar and that’s pushing grain prices higher,” Toby Hassall, a research analyst at CWA Global Markets Pty, said by phone from Sydney. Still, “fundamentals are not strong across the complex overall,” Hassall said, referring to corn, soybeans and wheat.
Wheat prices may fall 8.6 percent by July from the closing price of $4.7925 a bushel on April 9, according to the average estimate of 15 analysts surveyed by Bloomberg.
Even if wheat farmers in the U.S., the largest exporter, don’t plant the grain, world inventories last year of 165.23 million tons and production of 618.11 million tons in the year ending May 31 would still exceed estimated demand by 21 percent, according to data from the U.S. Department of Agriculture.
‘Hard to See’
“It’s hard to see Chicago wheat prices rallying for a sustained period,” Hassall said. “We’ve seen Black Sea and European wheat competing for the global export market.”
A halt in Chinese purchases of Argentine soybean oil may help to support soybean prices in Chicago on speculation crushers may buy more beans from other suppliers including the U.S., Hassall said.
China stopped approving permits to import soybean oil from Argentina, four executives familiar with the halt said last week, as a trade rift widens between the biggest buyer and largest supplier of the commodity.
An Argentine delegation in Beijing last week failed to reach agreement on the matter as China’s government said the issues relate to oil quality, said the people, who declined to be identified as they’re not authorized to speak publicly. China is likely to maintain its curbs in the near term, they said.
