Lower dollar sparks wheat rally

Market Line June 2, 2009 Wheat futures saw a major rally Monday with some contracts closing nearly 40 cents higher. What’s going on?

Linn: “The rally is being fueled by compelling technical and fundamental stories as well as the return of the fund investor sector. Outside markets were also supportive.”

Terry Linn of the Linn Group at the Chicago Board of Trade. In particular, traders pointed to a sharply lower U.S. dollar. Higher crude oil was also supportive to grains. Weekly export inspections for wheat were not that great however, and were down from the previous week.

After the close USDA reported spring wheat seeding 89 percent complete. The five year average for now is 98 percent.

Some analysts say wheat futures will continue to climb as long as they have the support of a weaker dollar and stronger energy prices.

On Monday Chicago July wheat was up 37 ½ cents at 6-74 ½. July corn up 9 ½ at 4-45 ¾. Portland soft white wheat and club wheat up a dime at mostly 6-28 with some club premiums to 7-25. August new crop soft white 10-15 cents higher at 6-25 to 6-35. HRW 11.5 % protein 37-39 cents higher at mostly 7-56. DNS 14% protein 18-23 cents higher at mostly 8-80. No Portland barley bids.

Bullish stocks couldn’t help cattle futures Monday and they closed lower. Boxed beef prices fell over a dollar on both choice and select. There are expectations of lower cash prices on both fed and feeder cattle. August live cattle down 17 cents at 81-65. August feeders down 157 at 100-17. July Class III milk up six cents at 11-22.

I’m Bob Hoff and that’s Market Line on the Northwest Ag Information Network.

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