GRAINS-Soybeans down for second day on dollar; Argentine weather in focus

In Commodity News 21/01/2017

Chicago soybeans slid for a second session on Friday with a strong dollar weighing on prices, although crop-damaging floods in Argentina kept a floor under the market.

Wheat fell for a third consecutive session on concerns over slowing demand after prices earlier this week climbed to their highest since August.

The Chicago Board Of Trade most-active soybean contract is up 1.7 percent this week, adding to last week’s 5.2 percent gain.

Soybeans are drawing support from the threat of rain-damage to crops in Argentina, the world’s third largest soybean exporter and the top supplier of soymeal and soyoil.

Argentina will harvest 52.9 million tonnes of soy this season, the Rosario grains exchange said on Thursday, cutting its previous 54.4 million tonne forecast due to bad weather.

Also on Thursday, the Buenos Aires Grains Exchange shaved its soy planting estimate for the current 2016/17 season to 19.2

million hectares (47.4 million acres) from a previous forecast of 19.3 million hectares, citing extreme weather.

“The Buenos Aires Grains Exchange said more than half of that area could be lost, depending on how the weather pans out over the next few weeks,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“Affected regions are expected to dry down over the coming days.”

U.S. producers are poised to plant 90.52 million acres of soybeans later this year, topping the all-time high set in 2016 by about 7 million acres, a Farm Futures survey indicated.

The dollar held its gains on Friday as investors braced for U.S. President-elect Donald Trump to be sworn in, while the euro rebounded as the European Central Bank held policy steady.

A stronger dollar makes U.S. agricultural products uncompetitive in the world market, giving advantage to rival exporters in South America and the Black Sea region.

Corn is up 2 percent this week, the biggest weekly gain since the week ended Dec. 9 and wheat is down 0.8 percent, first weekly decline in a month.

The International Grains Council on Thursday raised its forecast for the global grains crop in 2016/17 from an already record level, partly driven by improved outlook for China’s corn crop and wheat production in Australia.

Traders expected the USDA in its export sales report due on Friday to show corn sales in the week to Jan. 12 at 900,000 to 1.2 million tonnes.

 Grains prices at  0350 GMT

 Contract    Last     Change  Pct chg  Two-day chg  MA 30    RSI
CBOT wheat  422.75   -0.75   -0.18%   -2.48%       413.74   53

 CBOT soy    1064.50  -5.75   -0.54%   -0.44%       1028.81  70
CBOT corn   365.75   -0.50   -0.14%   +0.07%       356.66   71
 CBOT rice   9.79     -$0.04  -0.46%   -1.61%       $9.78    59

 Euro/dlr    $1.069   $0.006  +0.53%   -0.24%                
WTI crude   51.50    $0.13   +0.25%   +0.82%       $52.34   43
 Currencies                                                  

 USD/AUD     0.7583   0.008   +1.04%   +0.22%

Most active contracts

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Amrutha Gayathri)