Chicago corn and wheat futures eased on Thursday as a stronger dollar and expectations of ample supply stalled a rebound this week, while soybeans held steady amid renewed export hopes.

The dollar index regained ground as investors assessed U.S. President Donald Trump’s latest comments on Federal Reserve Chair Jerome Powell. Reports that Trump was preparing to fire Powell sent the dollar lower on Wednesday before the currency pared losses when Trump said he was not planning to do so.

A stronger dollar makes U.S. grain more expensive overseas.

Favourable crop conditions in the U.S. Midwest coupled with large corn and soybean harvests in Brazil have created supply pressure in recent weeks.

Adjusted for inflation, month-to-date price averages for CBOT soybeans and corn are at their lowest July levels since 2006.

December corn (CZ25) on the Chicago Board of Trade was down 0.2% by 1157 GMT at $4.23-1/4 a bushel, as a short-covering rebound from a contract low of $4.07-1/2 on Monday lost impetus.

“While price weakness attracted opportunistic demand, a favourable weather outlook could well see lows tested again in the weeks ahead,” Rabobank analysts said regarding corn.

CBOT soybeans were up 0.2% at $10.22 a bushel, holding on to a near 2% gain from Wednesday when hopes of revived demand from China boosted the oilseed market.

Wednesday’s soybean rally was aided by a U.S. Department of Agriculture (USDA) notification that exporters had sold 120,000 metric tons of U.S. soybeans to undisclosed destinations.

This triggered speculation that the purchases were made by China, whose soy imports from the U.S. have dried up this year amid trade tensions between Washington and Beijing.

Meanwhile, Trump said Indonesia, a top-five U.S. soybean importer, had committed to purchasing $4.5 billion in American agricultural products in a trade deal.

Uncertainty over how Trump’s tariff-based talks with other trading partners including the European Union would affect agricultural demand lingered in grain markets.

CBOT wheat was 0.7% lower at $5.37-1/2 a bushel to hold near a one-month low.

Supply pressure from ongoing harvests in the United States and elsewhere in the Northern Hemisphere remained a cap on wheat prices.

Grain traders are also awaiting weekly U.S. export sales on Thursday for an update on overseas demand.
Source: Reuters