Wheat Trims Weekly Advance as Dollar Rally Seen Curbing Demand

March 21st, 2014

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Category: Grains, Oilseeds

Weather affecting agriculture(Bloomberg) – Wheat declined, paring a third weekly gain, as a rally in the U.S. dollar threatened to curb demand from importers. Corn and soybeans were little changed.

Wheat for May delivery dropped as much as 0.6 percent to $6.995 a bushel on the Chicago Board of Trade before trading at $7.0025 by 12:51 p.m. in Singapore. Prices are 1.9 percent higher this week.

The dollar was set for its biggest weekly advance in two months versus major peers after U.S. Federal Reserve Chair Janet Yellen said interest rates could rise “around six months” after asset purchases end, most likely in the fall. Wheat surged 16 percent in March, poised for the biggest monthly gain since July 2012, amid shipping delays in Canada, tension in Ukraine and worsening crop conditions in the U.S.

“The stronger U.S. dollar weighed on the dollar-denominated wheat, making it more expensive to overseas buyers,” Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, said in an e-mail. “Profit-taking also weighed on prices, especially after wheat had been surging in previous sessions due to unfavorable weather conditions and tensions between Ukraine and Russia.”

Corn for delivery in May was little changed at $4.7875 a bushel. Futures are set for a second weekly decline. Soybean futures for delivery in May dropped 0.2 percent to $14.3025 a bushel, trimming the weekly advance to 3 percent.

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