Grain, Soybeans Trade Higher as Dollar Falls Sharply

Corn and soybeans rose and wheat futures jumped Thursday as the value of the U.S. dollar declined sharply.

The value of the greenback lost more than 2% today, giving exporters hope that overseas buyers will make purchases. A weaker dollar improves purchasing power for importers of U.S. goods.

Money managers as of Nov. 24 were net-short corn by 107,894 contracts, soybeans by 50,840 contracts, Chicago wheat by 46,671 contracts and Kansas City wheat by 24,100 contracts. With such large short positions, or bets that prices would fall, it’s likely some speculative investors are buying back contracts and liquidating their positions on fears prices will rise.

Still, demand has been, at best, fragile lately.

Export sales in the week that ended on Nov. 26, reported this morning, were down sharply for both commodities versus the prior seven days.

Corn sales of 499,400 metric tons were down 50 percent from the prior four-week average, the U.S. Department of Agriculture said in a report today.  Commitments to purchase from U.S. inventories since the start of the marketing year are down 25% from the same timeframe a year earlier.

Soybean exporters sold 878,300 metric tons of soybeans, down 29 percent from the prior four-week average.  Commitments to buy U.S. soybeans are down 17 percent from the prior year, according to the USDA.

Corn futures for March delivery gained 5 ¾ cents to $3.76 a bushel on the Chicago Board of Trade.

Soybean futures for January delivery rose 4 ¾ cents to $8.97 a bushel in Chicago. Soymeal for January delivery gained 30 cents to $287 per short ton, while soyoil rose 0.30 cent at 30.87 cents a pound.

Wheat futures also jumped on the weaker dollar. Futures in Kansas City that represent hard-red winter varieties grown in the southern Plains, returned to par with Chicago wheat in intraday trading before trailing off.

Wheat futures for March delivery rose 11 cents to $4.78 ¼ a bushel in Chicago. Kansas City wheat rose 9 ¼ cents to $4.75 ¼ a bushel.

In outside markets, brent crude oil gained 3.4% to $43.95 a barrel, while West Texas Intermediate crude rose 3% to $41.15 a barrel. The Dow Jones Industrial Average followed the dollar lower, declining 1.4% late in the day.

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