(Reuters) – Chicago wheat traded little changed on Tuesday after posting its biggest daily loss in more than two months in the last session, pressured by a lack of demand for U.S. supplies as the dollar strengthens.
Soybean prices inched up after declining 1.7 percent on Monday, although gains were capped by an easing of concerns over Brazilian supplies.
“The concerns about frost damage in the U.S., which had driven up the (wheat) price at the end of last week, appear to be dissipating again,” Commerzbank said in a note.
“What is more, U.S. wheat is hardly able to compete internationally at prices well above $5 given that the U.S. dollar is also continuing to appreciate. Last reporting week already saw far less U.S. wheat exported than in the preceding week, and only roughly half as much as from the EU,” it added.
A stronger dollar, which is hovering around an 11-year high against a basket of currencies, has eroded the competitiveness of U.S. products.
“We therefore see little upside potential for U.S. wheat in the current environment and would regard any phases of price strength as merely temporary,” Commerzbank said.
Wheat fell 2.5 percent on Monday, its biggest loss since Dec. 24, following news that top importer Egypt had snapped up 110,000 tonnes of Russian and Ukrainian supplies in its latest tender.
Chicago Board of Trade May wheat was up 0.25 percent at $5.01-1/2 a bushel by 1135 GMT, while May soybeans added 0.12 percent at $10.15 a bushel.
Recent snow in the U.S. Plains and Midwest provided a protective blanket for the dormant crop in key production areas, calming fears about freeze damage and causing some investors to take a risk premium out of the market. More snow was forecast, which will further boost soil moisture.
Brazil’s truckers continued their protests on Monday but road blockages were down to 24 from 99 a week ago. The government cracked down on protesters and promised to implement a law to lower toll costs.
The U.S. Department of Agriculture said weekly export inspections of soybeans fell to 635,164 tonnes in the latest week, below forecasts for 750,000 to 950,000 tonnes.
