Chicago grain prices hike as dollar tumbles

Chicago grain futures hiked Wednesday as U.S. dollar dropped, increasing the appeal of U.S. agricultural export in the overseas markets. Wheat jumped the most in seven weeks on speculations that the excessive rain in eastern Australia may pose a threat to crop quality and delay harvest in the world's fourth-largest wheat exporter.

The most active corn contract for March delivery surged 22.25 cents, or 4.1 percent, to 5.6625 dollars per bushel. March wheat futures hiked 49.5 cents, or 7.2 percent, at 7.4 dollars a bushel. January soybean rallied 40 cents, or 3.2 percent, to 12.83 dollars per bushel.

Market traders mainly attributed Wednesday's rebound to the loss in dollar. Dollar reversed gains as the euro regained strengths on speculation that the European Central Bank might take action to curb its recent losing streak.

A weaker dollar usually helps boost the competitive edge of U.S. grain export in the overseas market, thus drives up the price. Besides, market traders noted that funds were heavy buyers throughout the grains during morning session with support from the weaker dollar.

As for the wheat, a trader noted the persistent dry weather in the western U.S. Plains hard red wheat belt, as well as the weather forecast for additional precipitation in eastern Australia in the next two weeks, which will reduce grain quality and delay the harvest, were both considered very bullish for wheat prices.

Besides, a strong demand from Egypt, the world's largest wheat importer also helps buoy up the market. Egypt bought 55,000 tons of U.S. soft wheat and 165,000 tons of U.S. hard wheat. All of it is for shipment during Feb. 1-10.

Traders said that the potential deterioration of wheat quality in Australia spurred some panic buying Wednesday and the fact that all of the wheat was from the U.S. also offered a strong boost to wheat prices.
(Source:xinhua)