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Wheat firm on Argentina crop downgrades, dollar slide

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PARIS/SINGAPORE — Chicago wheat futures on Thursday

extended a bounce from a five-week low, supported by weakness in the dollar and

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reduced forecasts for Argentina’s drought-hit crop.

Lingering uncertainty over the future of a United Nations-backed Black Sea

export corridor also underpinned grain markets.

Chicago corn was firm to hold near a one-week high touched on Wednesday,

while soybeans rose to a two-week top.

The dollar index slipped to a new one-month low before steadying.

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Investors are debating whether the U.S. Federal Reserve will curb its pace

of interest rate increases, while bracing for an expected rate hike from the

European Central Bank.

A weaker dollar makes U.S. commodities cheaper overseas.

Argentina’s 2022/23 wheat harvest will come in at 13.7 million tonnes, the

Rosario grain exchange said on Wednesday, a sharp cut from its previous forecast

of 15 million tonnes.

That followed an estimate of 15.5 million tonnes by the U.S. Department of

Agriculture’s local office in Argentina, which was 2 million tonnes below the

USDA’s official forecast.

The reduced production outlook cooled hopes that rain in recent days may

boost crop conditions.

“Argentina has received some rains this week but traders see a drier period

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just ahead,” research firm Hightower said in a report. “Some weather traders see

the drought stress continuing in the longer term.”

Argentina is a major wheat exporter and a poor crop could tighten

international supply if the war in Ukraine continues to hamper Black Sea trade.

United Nations aid chief Martin Griffiths said on Wednesday that he was

“relatively optimistic” that the corridor arrangement for Ukrainian exports

would be extended beyond mid-November.

The most-active wheat contract on the Chicago Board of Trade (CBOT)

was up 1.1% at $8.49-1/2 a bushel by 0929 GMT, moving further away from

Wednesday’s low of $8.24.

CBOT soybeans edged up 0.4% to $13.99 a bushel and corn also

rose 0.4%, to $6.87-1/2 a bushel.

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The dollar’s weakness has added to improved export sentiment in soybeans

after sign of a pick-up in overseas demand.

Traders are awaiting weekly U.S. export sales data at 1230 GMT for further

clues.

Prices at 0929 GMT

Last Change Pct End 2021 Ytd Pct

Move Move

CBOT wheat 849.50 9.00 1.07 770.75 10.22

CBOT corn 687.50 2.50 0.36 593.25 15.89

CBOT soy 1399.00 6.00 0.43 1339.25 4.46

Paris wheat 337.50 3.25 0.97 276.75 21.95

Paris maize 334.75 2.50 0.75 226.00 48.12

Paris rape 645.00 -0.75 -0.12 754.00 -14.46

WTI crude oil 87.86 -0.05 -0.06 75.21 16.82

Euro/dlr 1.00 0.00 -0.31 1.1368 -11.63

Most active contracts – Wheat, corn and soy US cents/bushel, Paris

futures in euros per tonne

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by

Rashmi Aich and Subhranshu Sahu)

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