FX:Wheat futures fall to 2-day low as U.S. crop concerns ease
Forexpros – Wheat futures were down on Tuesday, slumping to a two-day low after a government report showed that U.S. wheat crop conditions improved last week, while a broadly stronger U.S. dollar also weighed.
On the Chicago Mercantile Exchange, wheat futures for December delivery traded at USD7.8762 a bushel during European morning trade, dropping 0.8%.
It earlier fell as much as 1.1% to trade at USD7.8462 a bushel, the lowest price since August 26.
The U.S. Department of Agriculture said in its weekly crop progress report published after markets closed Monday that approximately 61% of the U.S. spring-wheat crop was rated in ‘good’ to ‘excellent’ condition as of August 28, while only 9% was rated ‘very poor’ to ‘poor’.
The report showed that nearly 50% of the U.S. spring-wheat crop was harvested as of last week, up significantly from 29% a week earlier, while almost 97% of the U.S. winter-wheat crop was harvested, compared to 94% a week ago.
Favorable weather conditions in the U.S. also weighed on prices after industry weather group Telvent forecast rain over most parts of the U.S. central and southern plains during the upcoming week.
The weather group said in a report late Monday that while the total rainfall may not be large, “any improvement in soil moisture will be welcome”.
The U.S. is the world’s fourth largest wheat producer and the biggest exporter of the grain.
Meanwhile, the U.S. dollar strengthened against most of its major counterparts, as risk appetite ebbed ahead of the release of the minutes of the Federal Reserve’s August policy setting meeting later in the day.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.61% to hit 74.21, the highest since August 26.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes dollar-priced commodities less attractive as an alternative investment.
Elsewhere on the Chicago Mercantile Exchange, corn for December delivery slumped 0.6% to trade at USD7.6288 a bushel, while soybeans for November delivery shed 0.56% to trade at USD14.3938 a bushel.
