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Soybean Futures Gain on Weaker Dollar

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June 2nd, 2017

Soybean futures rose Friday as the dollar fell to fresh lows.

The weaker dollar, which took a hit after an underwhelming U.S. jobs report, threw U.S. agricultural exporters a lifeline at a time when they are facing tough competition from South American producers. The WSJ dollar index dropped 0.5% to 88.32.

But broader selling in the commodity sector, with crude-oil futures sliding further below $50 a barrel, limited gains.

Export sales released by the U.S. Department of Agriculture on Friday morning were mixed. Corn and soybean sales were largely within expectations, but canceled orders of this year's wheat crop were accompanied by a larger-than-expected bump in wheat sales for the year to come.

Some analysts said that, for a season when Brazil and Argentina tend to ramp up their own exports, the figures were a relief.

"Given the time of year, anytime we're getting positive export sales is kind of bullish," said Brian Grossman, a market strategist at risk manager Zaner Group in Chicago. "The fact that we're moving it means a lot right now."

Soybean futures for July delivery rose 1% to $9.21 1/4 a bushel at the Chicago Board of Trade. Corn futures gained 0.6% to $3.72 3/4.

Minneapolis spring wheat continued to rally as drought concerns in the northern Plains and concerns about protein content in the winter wheat crop had traders betting on higher demand for that contract.

Spring wheat futures for July delivery touched $5.90 a bushel at the Minneapolis Grain Exchange, the highest point since mid-January, before closing up 0.9% to $5.83 3/4 a bushel.

CBOT July wheat futures closed 0.1% higher at $4.29 1/2 a bushel.

  - Benjamin Parkin at Dow Jones Newswires.

See Also: Corn Futures, Soybean Futures, Wheat Futures
Soybean futures, Corn, Wheat Tumble on Indications of Reduced Demand From Japan
By Jeff Wilson and Whitney McFerron - Mar 15, 2011

Soybean futures and corn tumbled the maximum allowed on the Chicago Board of Trade and wheat plunged the most in seven months on concern that the earthquake and nuclear crisis in Japan will reduce raw-material demand.

Equities in Japan had the biggest two-day drop since the 1987 crash as the risk of radiation leaks north of Tokyo escalated. U.S. Treasuries surged. Japan is the world’s leading buyer of corn, the third-largest importer of soybeans and the fifth-biggest purchaser of wheat.

“Increasing levels of radiation have people dumping positions in stocks and commodities and piling assets into cash,” said Alan Brugler, the president of Brugler Marketing & Management LLC in Omaha, Nebraska. “There’s increased risk aversion until the situation stabilizes in Japan.”

Corn futures for May delivery fell by the CBOT limit of 30 cents, or 4.5 percent, to close at $6.36 a bushel at 1:15 p.m., the lowest since Jan. 20.

Soybean futures for May delivery declined the 70-cent maximum, or 5.2 percent, to close at $12.70 a bushel, the lowest since Dec. 13.

Wheat futures for May delivery dropped 53 cents, or 7.4 percent, to close at $6.6775 a bushel in Chicago, the biggest decline since Aug. 6.

Oats fell the 20-cent maximum to a six-month low, while rice and soybean-oil futures also fell by the exchange limits in Chicago.

Shipments into Kashima and other ports on Japan’s east coast were stopped because of power outages after the 9.0- magnitude earthquake and tsunami, Zen-Noh, Japan’s largest corn buyer, said yesterday. Japan said today it plans to buy 32,381 metric tons of wheat in a tender on March 17, 76 percent less than it purchased last week.

Screen Imports

Asian countries moved to screen food imports from Japan following explosions at the Fukushima nuclear plant that raised radiation levels at the complex to harmful levels.

South Korea, Indonesia, Thailand, Malaysia, Singapore and the Philippines took steps to check fruit, vegetables, meat and seafood from Japan for nuclear material.

“It’s a fear-driven trade” focused on Japan, said Frank Cholly Sr., a senior strategist at Lind-Waldock, a broker in Chicago. “Demand is going to slow down, because even though they need to eat, they have more urgent things. They’ve got to stop the radiation leak, and they’ve got to find any survivors.”

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show. Wheat is the fourth-largest, behind hay, at $13 billion.

 - Jeff Wilson and Whitney McFerron in Chicago at Bloomberg.