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Chicago wheat drops the most in one month as dollar firms

15 December 2010 02:13 (UTC +04:00)

Baku-APA. Chicago wheat tumbled the most in one month on Tuesday, as U.S. dollar reversed losses and funds started to book in profits before the end of the year. Corn and soybean both lost momentum and edged lower, APA reports quoting news.xinhuanet.com website.

The most active corn contract for March delivery trimmed 1.25 cents, or 0.2 percent, to 5.8725 dollars per bushel. March wheat futures pared 17 cents, or 2.2 percent, at 7.6325 dollars a bushel. January soybean dropped 6.5 cents, or 0.5 percent, to 12.96 dollars per bushel.

The greenback regained some ground on Tuesday morning, paring earlier losses, encouraged by a bigger-than-expected rise in U.S. retail sales for November, as well as an upbeat U.S. producer prices. The stronger dollar was considered as a drag on grain prices, eroding their competitive edge in the International market.

A trader attributed the loss of wheat prices to the improving weather conditions in eastern Australia, but some trader believed that the concerns over excessive wet conditions in Australia as well as the persistent dryness in U.S. hard red wheat belt have already been factored into the price, and investors and traders has been keen on booking profits after the recent rally of wheat.

Meanwhile, lack of activity in the cash market recently added upward pressure on grain prices, as a weekend storm blanketed the northern Midwest with heavy snow and brought bitterly cold weather.