Wheat on track for second weekly loss as dollar rises

Wheat futures slumped nearly three percent in American trade away from April 13 highs for the second session, as the dollar index rebounded from March 27 lows for the fourth straight session, amid a lack of data from the US, the world's second largest wheat exporter, and amid forecasts of better weather and rainfall in southern US hills. 

As of 07:58 GMT, wheat futures due on July 15 fell 2.75% to $4.7725 from the opening of $4.9075, while the dollar index rose 0.41% to 90.31 from the opening of 89.94. 

Federal Reserve Bank of San Francisco President John Williams spoke earlier today at a fireside chat hosted by the Fisher Center for Real Estate and Urban Economics, in California, where he pointed to improved labor conditions and growth in wages, while inflation steadies as the Fed continues to tighten monetary policy and hike interest rates gradually. 

The US Department of Agriculture reported wheat sales dropped 66.9 thousand tonnes in the week ending April 12 to the lowest this marketing year, with Philippines at the top of the list at 48.3 thousand tonnes, then Chile at 33 thousand, and Peru at 7.4K, while Japan and unknown buyers cancelled 63K and 67K tonnes of shipments. 

The USDA's report on Tuesday showed only 31% of winter wheat harvest is good or excellent, compared to 30% in the previous week, and much lower than 52% in the same period of last year. 

The USDA also reported 483.06 thousand tonnes of inspected wheat in the week ending April 12, up from 431.48 thousand in the previous week, and 685.44 thousand tonnes in the same period of last year, with total inspected wheat product in the marketing year starting June amounting to 20.9 million tonnes, down from 23.2 million in the previous year. 

Otherwise, the USDA recently released its monthly report on supply and demand projections, raising expectations for US wheat inventories in the marketing year of 2017-2018 by 30 million bushels to 1.064 billion bushels, while maintaining wheat prices projections between $4.6 and $4.7 per bushel. 

The USDA raised forecasts for global wheat supplies by 3 million tonnes, while expecting another record high for output at 759.8 million tonnes, with growth in supplies expected to surpass consumption growth, while global wheat inventories are expected to rise by 2.3 million tonnes to 271.2 million tonnes.