Wheat marks second weekly loss in row on fine weather forecasts

Wheat futures fell over two percent in American trade away from July 14 highs for the seventh session out of 11, as the dollar index rose to early March highs, following earlier data from the US, the world's second largest wheat exporter, and amid forecasts of rainfall across US grain belts, which were recently hit by drought. 

As of 07:58 GMT, wheat futures due on May 15 fell 2.30% to $4.6775 from the opening of $4.7875, while the dollar index rose 0.08% to 90.21 from the opening of 90.14, marking a two-week high. 

Earlier US data showed housing starts fell 7% in February to 1.236 million units, compared to January's 9.7% rise to 1.329 million, while analysts expected a 2.7% drop to 1.290 million. 

Building permits fell 5.7% to 1.298 million, compared to a 7.4% rise to 1.396 million in January, missing expectations of a 3.8% drop to 1.325 million, while industrial production rose 1.1% in February, compared to a 0.3% dip in February, revised from a 0.1% fall, while analysts expected a 0.3% rise. 

The Capacity Utilization Rate rose to 78.1% in February from 77.4% in January, revised from 77.5%, beating forecasts of 77.7%. 

University of Michigan released its survey on consumer confidence, showing a rise to 102.0 in March from 99.7 in February, beating expectations of 99.2. 

The US Department of Agriculture recently reported wheat sales in the week ending March 1 at 391.5 thousand tonnes, nearly double the 191.1 thousand in the previous week, and up 24% from the four-week average, with unknown buyers at the top of the list at 113.5 thousand tonnes. 

Then South Korea at 71.5 thousand tonnes, Japan at 66.1 thousand, Philippines and Colombia at 52K and 34K respectively, while Mexico canceled a 10.2K order, and finally, the USDA raised its wheat inventory expectations to 1.034 million bushels.  

Last month, Egypt, the world's largest wheat importer, announced a March deadline to set up local prices a month before harvest, with the Egyptian agriculture ministry stating that wheat used in the bread subsidy program reached 9 million tonnes a year. 

The Egyptian ministry didn't specify whether it will link local prices with global ones, or will get back to the old system, where it subsidized farmers with a price higher than global ones, noting that Egypt bought about 3.6 million tonnes of local wheat last year.