US corn, soyabeans and wheat futures rallied on Friday as investors used a sharp drop in the dollar as an excuse to cover short positions ahead of the weekend, traders said. Investment funds had built up short positions in all three commodities at the beginning of the month as export demand for US supplies waned and the dollar rallied to its highest in more than a decade.
But the dollar reversed course this week, undermined by expectations that US interest rates will rise much slower than expected. The weakness provided a spark to the grain markets.
"Fundamentals are not that big of a deal at the moment," said Ted Seifried, chief market strategist at Zaner Ag Hedge. "You get a drop in the dollar like this and you get a nice pop in the grains."
Chicago Board of Trade corn for May delivery was up 10-1/2 cents at $3.84 a bushel at 11:05 am CDT (1605 GMT) and CBOT May wheat was 15-1/2 cents higher at $5.27-1/2 a bushel. CBOT May soyabeans gained 15-3/4 cents to $9.77-1/2 a bushel.
Wheat received additional support from concerns about dryness in the US Plains hindering crop development.
"Ongoing dryness in the US plains is stressing winter wheat crops, encouraging fund shorts to trim their positions," David Sheppard, managing director at UK merchant Gleadell, said in a market note.
US wheat plants have faced a lack of moisture plus severe cold spells this winter, despite some showers in recent days.
For the week, CBOT May was up 5.1 percent, which would be the biggest weekly gain for the benchmark contract since early December. May soyabeans were 0.4 percent higher for the week and May corn was up 1.1 percent.
Comments
Comments are closed.