Given the roller-coaster ride in Chicago grains last week as the dollar fell and rose, more volatility is likely in the coming week as investors weigh the health of the economy with the weather outside. Added to the mix will be the US Department of Agriculture's updated forecasts for the amount of grain and oilseeds left in storage bins this fall and a year from now.
"Last week has shown us the dramatic impact the dollar and crude has had on our markets. We'll continue to watch those markets very carefully," said Rich Feltes, senior vice president at MF Global Research. As the dollar sank to its lowest level in 2009 on optimism the global economy is on the road to recovery, managed money flowed back into commodities, including the grains, rallying corn, soyabeans and wheat to eight-month highs.
Demand for dollar-denominated commodities usually rises as the dollar falls. On the flip side, when the dollar rebounded on Friday, grain prices sank back on profit-taking. By week's end, based on prices for July futures deliveries, soyabeans on the Chicago Board of Trade were up 3.5 percent for the week at $12.25-1/2 a bushel, corn up nearly 2 percent at $4.44, but wheat down 2 percent at $6.23.
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