Chicago wheat, soybeans, corn lower on stronger U.S. dollar

Chicago Board of Trade (CBOT) wheat, soybean and corn futures all closed lower Friday, as the U.S. dollar regained its footing, weighing on the dollar-denominated commodities.

Chicago wheat led losses as the most active wheat contract for March delivery dropped 6 cents, or 1.27 percent, to close at 4.6675 dollars per bushel. Corn for March delivery lost 2.75 cents, or 0.75 percent, to close at 3.6575 U.S. dollars per bushel. March soybean delivery shed 7 cents, or 0.8 percent, to close at 8.675 dollars per bushel.

The U.S. Dollar Index, a measure of the dollar against six major currencies, rallied by more than 0.5 percent in the morning session as a January U.S. jobs report offered a mixed picture of the labor market, but appeared to reopen the door to a possible rate increase by the U.S. central bank.

Generally, increasing interest rates would send the U.S. dollar higher. Analysts noted a stronger U.S. dollar can be a negative for agricultural commodities, priced in U.S. dollars because it makes them more expensive for non-dollar investors, while a weaker dollar can support dollar-denominated commodities.

Chicago wheat and soybean also came under pressure by lower world wheat and soybean prices amid a lack of fresh demand. "The lack of a sale was seen as bearish as the world seeks new demand amid growing farm sales in the Black Sea and Europe," said AgResource company, a Chicago-based agricultural research institute. "Paris wheat futures closed at new contract lows while Chicago futures are back to its lowest price since Jan. 12."

For the week, the most active corn contract for March delivery fell by 1.68 percent, and March wheat lost 2.61 percent, while March soybeans fell by 1.67 percent. Endit