Wednesday, May 18

Wheat, corn slip on firmer dollar; Black Sea tensions cap losses


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SINGAPORE — Chicago crop markets retreated slightly in early trade on Thursday, after the US Federal Reserve said it was likely to raise interest in March, which strengthened the dollar and clipped demand for dollar-priced commodities.

Wheat, corn and soybeans were all down around 0.6% in early trade in Asia, while the US dollar index was 0.6% higher.

FUNDAMENTALS

* The most-active wheat contract on the Chicago Board of Trade (CBOT) fell 1.16% to $7.85-3/4 a bushel, as of 0209 GMT. Soybeans lost 0.61% to $14.31 a bushel and corn fell 0.52% to $6.23-3 /4 a bushel.

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* The Fed on Wednesday said it was likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what US central bank chief Jerome Powell pledged would be a sustained battle to tame inflation.

* Tensions remain high over Russia’s demands that NATO pull back troops and weapons from Eastern Europe and bar Ukraine from every joining. The United States said on Wednesday it had set out a diplomatic path to address the sweeping demands, as Moscow intensified its military build- up near Ukraine with new drills.

* Interruptions to grain flows from the Black Sea region could leave importers scrambling for alternatives including European Union and US wheat, and fuel food inflation.

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* Ukraine is projected to be the world’s third-largest exporter of corn in the 2021/22 season and fourth-largest exporter of wheat, according to International Grains Council data. Russia is the world’s top wheat exporter.

* Japanese trading house Marubeni Corp will sell the grains business of its US unit Gavilon to commodities trader Glencore Plc’s Viterra arm for $1.125 billion, plus working capital, Viterra said on Wednesday.

* China’s agriculture ministry will promote intercropping of soybeans with corn on more than 1 million hectares of land this year, it said on Wednesday, seeking to boost output of the oilseed without reducing production of corn.

MARKET NEWS

* US stocks retreated Wednesday, erasing strong gains, after the Fed signaled an interest rate hike could be coming soon, while supply concerns stemming from tension between Russia and Ukraine saw oil prices touch highs not seen since 2014.

DATA/EVENTS (GMT) 1330 US US grain/oilseed export sales 1330 US Durable Goods Dec 1330 US GDP Advance Q4 1330 US Initial Jobless Clm Weekly (Reporting By Gavin Maguire; Editing by Rashmi Aich)



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