US wheat futures retreated on Friday after a five-session rally, led by declines in corn and soyabeans as a surging dollar prompted broad weakness in commodities. The dollar set a fresh 12-year high against the euro on expectations of a US Federal Reserve interest rate hike in contrast to easing monetary policy actions by most other major central banks.
At the Chicago Board of Trade as of 11:45 am CDT (1645 GMT), May wheat was down 5-1/4 cents at $5.02 per bushel. May corn was down 7 cents at $3.81-1/2 and May soyabeans were down 14-1/2 cents at $9.76 a bushel. Wheat was still on track to post a weekly gain of about 4 percent, its biggest in a month, reflecting fund short-covering and worries about dryness in the US Plains.
But corn and soyabeans were each set to drop about 1 percent. May soyabeans fell to a one-month low, one day after the release of disappointing weekly US export sales data. "The dollar strength is wreaking havoc on the commodities here. We are seeing some pressure with the weak (corn and soyabean) export sales as the dollar continues to march higher," said Darin Fessler of Lakefront Futures & Options Inc.
Soyabeans were also pressured by expectations for rising global soya inventories as the South American harvest progresses. "We're really faced with extremely hefty soyabean production," said Leopold Michallet of French consultancy Agritel. Corn sagged but remained locked in the roughly 15-cent trading range that has been in place since early February. Some brokers expect a stagnant market to persist ahead of the US spring planting season and the US Department of Agriculture's March 31 planting intentions report.
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