SINGAPORE — Chicago wheat futures gained more ground on Monday, underpinned by a weaker U.S. dollar, with the market’s focus on talks this week to renew a Black Sea deal that will allow Ukraine to continue shipping grains.
Soybeans and corn rose on support from a severe drought cutting output in key supplier Argentina.
FUNDAMENTALS
* The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.4% at $6.81-3/4 a bushel, as of 0106 GMT, soybeans gained 0.3% at $15.11-3/4 a bushel and corn rose 0.1% to $6.18 a bushel.
* The dollar weakened on Friday after U.S. labor data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve’s pace of interest rate hikes modest and thereby reduce the greenback’s appeal.
* A weaker dollar makes the greenback-priced commodities cheaper for buyers holding other currencies.
* The market’s attention is on talks to renew the Black Sea grain deal.
* A top U.N. trade official will meet senior Russian officials in Geneva this week to discuss extending the deal.
* However, Russia’s foreign ministry said on Sunday that Russian representatives had not yet taken part in negotiations on extending the Black Sea grain deal.
* A historic drought ravaging Argentina’s crops is deepening the country’s economic crisis, crushing farmers across the Pampas, heightening default fears and putting at risk targets agreed with the International Monetary Fund (IMF).
* The South American nation, the world’s top exporter of processed soybeans and No. 3 for corn, is in the grip of it worst drought in over 60 years, which has led to repeated sharp cuts to soybean and corn harvest forecasts.
* Large speculators cut their net long position in CBOT corn futures in the week to Feb. 21, regulatory data released on Friday showed.
* The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and raised their net long position in soybeans.
MARKET NEWS
* U.S. stock futures rallied in Asian trade on Monday as authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB), while investors wagered future hikes in U.S rates would now be less aggressive.
DATA/EVENTS (GMT) 0700 UK Claimant Count Unem Chng Feb 0700 UK ILO Unemployment Rate Jan 0700 UK HMRC Payrolls Change Feb Euro group finance ministers meet in Brussels (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips)
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