US wheat futures climbed nearly 2 percent on Thursday, the sixth gain in six sessions, as a falling dollar boosted most commodities after the US Federal Reserve said it would not raise interest rates for at least two years. Wheat hit a 22-day high and corn kept pace for much of the day before easing back to an unchanged close on a pickup in farmer sales. Corn prices have not declined for six sessions.
Wheat futures, which have gone up more than 10 percent in about a week at the Chicago Board of Trade, were also supported by concerns that the wheat crop in Russia, the third largest exporter in the current season, could be hurt by lower-than-normal temperatures in some growing areas.
Moreover, analyst ProAgro said on Thursday the grain harvest of major exporter Ukraine was likely to come in at about 40 million tonnes in 2012, down from a record of 56.7 million tonnes in 2011 due to a fall in acreage due to bad weather while winter crops were being sown.
Many traders expect the United States to capture some of the business if Russia curbs exports to ensure sufficient supplies at home. "US SRW wheat is now the cheapest soft wheat (in the world). A declining dollar is also pricing SRW wheat more competitively," said Alex Bos, analyst at Macqaurie Bank LTD in New York. CBOT March wheat finished 12-1/4 cents, or 1.9 percent, higher at $6.53-1/2 per bushel, peaking at $6.58-1/4, the highest price since January 4. CBOT March corn ended flat at $6.43-1/2.
CBOT March soyabeans settled up 9-1/4 cents at $12.22-3/4 after earlier touching a three-week high, bolstered by a soya production forecast from the Buenos Aires Grains Exchange. "The market is digesting the farmer selling of the last couple of sessions, and spreaders were fairly active buying beans and selling the corn today," ABN Amro analyst Charlie Sernatinger said in a note to clients, citing lower bean production estimates out of South America. Grains surged in the cash markets as farmers held out for higher prices and a pick up in export demand after a recent slump in prices.
The Fed's decision to keep interest rates near zero into 2014 and suggestion the bank was ready to provide more stimulus if the economy deteriorates supported risk assets like grains as investors bailed out of the dollar. Oil was up sharply and gold also gained.
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