US wheat futures slid half a percent on Monday, while corn and soyabeans ticked lower as a firm dollar weighed on the grain markets amid profit-taking in wheat after gains in the previous session. The market's attention is turning towards the weather in the US Midwest where more rains forecast this week will probably prevent farmers from carrying out fieldwork, threatening to delay corn and soyabean plantings.
"The dollar is getting some support around these levels," said Scott Briggs, Agricultural Commodity Strategist with ANZ in Melbourne. "With some gains in wheat on Friday you might expect it to be flat to weak today it's just day-to-day fluctuations." The yen was on defensive on Monday, hovering within striking distance of three-week lows against the US dollar, on growing expectations the Bank of Japan could mull loosening monetary policy further this week.
The dollar index, which measures the strength of the dollar against six major currencies, was up 0.2 percent. A strong dollar reduces the appeal of dollar-priced US commodities for buyers holding other currencies such as yen or euro. Analysts said the soyabean market was eyeing moves by China, which stirred concerns last week when US government data showed that the world's third-largest economy had cancelled purchases of 192,400 tonnes of US soya.
The question hanging over the market now is if China will buy any more old-crop soyabeans from the United States - which would be bullish - and more importantly, if there will be further cancellations, which would unnerve the market. "The soyabean cancellations that we saw last week is probably a theme that could grow," said Briggs. "I think there is potential for more news to come with possibilities of buyers switching to South American beans."
Traders in China said soya buyers who have overbooked US cargoes may still cancel a few more but the trend would be offset by loading delays in Brazil and possible Chinese intervention over falling pork prices. China is the world's largest soyabean importer and has been a steady buyer of US soyabeans, but the advancing harvest of a likely record-large South American soya crop this year has cut into US soyabean exports.
Cancellations of US soyabean purchases in the week ended March 4 by China, the world's top importer, marked the worst week of soyabean export sales in eight years, according to US Agriculture Department data. Chicago Board of Trade soya for May delivery lost 1-1/4 cents to $9.24-1/4 per bushel by 0404 GMT and May wheat fell 1-3/4 cents, or 0.4 percent, to $4.83-1/2 per bushel.
May corn was down quarter of a cent at $3.64 a bushel. US Midwest weather, which is likely to remain wet and cold, has a potential to delay corn and soyabean sowing this year. "The outlook calls for rain on Friday, mixing with, or changing to, snow in the eastern areas on Saturday," said Mike Palmerino, a forecaster at Telvent-DTN Weather. "More wet weather later this week and the prospects for colder temperatures and additional precipitation next week will prevent any significant spring field from taking place in the foreseeable future."
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