Wheat Heads for First Weekly Gain in Six After Dollar Slumps

By Jae Hur

Oct. 9 (Bloomberg) -- Wheat headed for the first weekly gain in six after advancing on speculation that the dollar’s slump will boost demand for supplies from the U.S., the world’s biggest exporter of the grain.

Futures in Chicago gained 7.4 percent in the previous four days as the dollar dropped to the lowest level in almost 14 months against a basket of six major currencies. Prices fell as much as 1.1 percent today before a U.S. Department of Agriculture report that is expected to forecast a record soybean harvest and the second-biggest corn output.

“It’s position squaring before the USDA’s announcement,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. “The market has support from the weaker dollar and pressure from forecasts for bumper U.S. harvests, especially for corn and soybeans.”

Wheat for December delivery fell 3.25 cents to $4.705 a bushel in electronic trading on the Chicago Board of Trade as of 12:58 p.m. Tokyo time. The contract yesterday touched $4.83, the highest level since Sept. 3.

The grain used to make bread, pasta and noodles has fallen 23 percent this year. Global production is expected to total 663.7 million metric tons, the largest behind last year’s record harvest, according to the U.S. Department of Agriculture.

The Dollar Index rallied as much as 0.5 percent after reaching 75.767 yesterday, the weakest since Aug. 11, 2008. A decline in the dollar increases demand from overseas importers holding other currencies.

Export Sales

Export sales in the week ended Oct. 1 totaled 767,300 tons for the marketing year ending May 31, up 43 percent from a week earlier, the USDA said yesterday in a report.

Corn for December delivery fell 0.8 percent to $3.6125 a bushel at 1:01 p.m. Tokyo time, snapping the previous four days’ advance. The grain has risen 8.3 percent this week, heading for the biggest such gain since Dec. 12.

November-delivery soybeans were down 0.6 percent at $9.3025 a bushel. The contract climbed 2.6 percent yesterday after reaching $9.42, the highest price since Sept. 18. The oilseed rose 5.5 percent this week heading, for the first weekly gain in three, after touching a six-month low of $8.7875 on Oct. 5.

The USDA is expected to forecast a soybean harvest of 3.295 billion bushels, up 1.5 percent from last month’s estimate of 3.245 billion and 2.959 billion bushels produced last year, according to analysts surveyed by Bloomberg News.

Corn production will rise to 13.006 billion bushels, up from 12.954 billion estimated last month, according to analysts surveyed. U.S. farmers harvested 12.101 billion bushels a year earlier.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net