Chicago Board of Trade soybean futures fell about 1% on Friday and corn also fell as the dollar rose after a much stronger-than-expected monthly US employment report lowered expectations for near-term interest rate cuts by the Federal Reserve .
“When that jobs report came out, the U.S. dollar shot up, and that seemed to be the catalyst for grains to come back down,” said Randy Place, grain analyst at Hightower Report.
A higher dollar makes U.S. grains less competitive globally, and higher interest rates tend to dampen economic growth and commodity demand.
CBOT corn followed the weak trend, but wheat futures were choppy and occasionally strengthened due to short-covering, traders said.
As of 12:46 pm CST (1846 GMT), CBOT March soybean futures were trading 13 cents lower at $11.90-1/4 per bushel. The contract hovered around Tuesday’s low of $11.87-3/4, the lowest on a continuous chart of the most active soy contract since November 2021.
CBOT March corn was 3-3/4 cents lower at $4.43-1/2 per bushel, while March wheat was 1/2 cent lower at $6.01 per bushel.
Soybeans experienced additional pressure from weak export demand. US soybean exports totaled just 165,800 metric tonnes in the week to January 25, the US Department of Agriculture (USDA) said on Thursday, the smallest weekly total since May.
Traders shrugged off concerns about stressful hot and dry weather in Argentina, a major corn supplier and the world’s largest exporter of soybean meal and soybean oil. The Buenos Aires Grain Exchange said high temperatures and lack of rain had led to a deterioration in water conditions, with water stress in some areas. However, the exchange said around 90% of areas were still “normal/excellent”.
CBOT wheat received support from higher KC hard red winter wheat futures, which firmed despite improvements in soil moisture across much of the US Plains and Midwest. In a weekly drought update released Thursday, the USDA said only 17% of the U.S. winter wheat crop was in a drought zone as of Jan. 30, down from 22% the week before and down from 58 % a year ago.
Meanwhile, world grain production is expected to reach a record high in 2023, the United Nations food agency said, as it reported its food price index fell to the lowest level in almost three years in January. (Reporting by Julie Ingwersen; Additional reporting by Gus Trompiz in Paris and Peter Hobson in Canberra; Editing by Kirsten Donovan)