Wheat, soybean futures fall on stronger dollar, crude slides
NEW YORK—Wheat and soybean futures fell sharply Thursday, driven lower by a stronger dollar that prompted investors to sell hard assets. Corn futures rose.
The greenback's jump pressured commodities across the board, with gold, silver, copper and crude oil also trading sharply lower in a big sell-off. A stronger dollar generally leads investors to sell commodities, which are considered safe-haven assets during times of rising inflation. A stronger dollar also makes commodities appear more expensive to overseas investors.
The dollar rose to a one-month high against the euro a day after the Federal Reserve cut interest rates by a quarter point but signaled its aggressive campaign to inject liquidity into distressed financial markets may be coming to an end. The dollar also got a boost by Commerce Department data showing that consumer spending rose 0.4 percent in March, more than expected.
U.S. grain futures fell swiftly on the dollar's rise, with wheat futures for July delivery falling 11 cents to settle at $7.90 a bushel on the Chicago Board of Trade. Wheat futures have retreated from record-highs above $13 a bushel in February, also pushed lower by expectations of improved global crop yields.
"We're no longer expecting a supply shortage so it's hard to find wheat buyers," said Elaine Kub, analyst with DTN in Omaha.
Other agriculture futures traded mixed Thursday. July soybeans dropped 43 cents to settle at $12.71 a bushel on the CBOT, while July corn rose 5 cents to settle at $6.1725 a bushel.
In energy futures, the stronger dollar helped push oil below $113 as speculators who pushed up the contract to record levels pulled out of the market.
Light, sweet crude for June delivery fell 94 cents to settle at $112.52 a barrel on the New York Mercantile Exchange. Earilier, the contracted traded as low as $110.30.
The end of a strike at an Exxon Mobil Corp. facility in Nigeria gave investors another reason to sell. Oil prices jumped last week on word of the strike and a separate labor action in Scotland, which ended Tuesday. Nigeria is a major U.S. oil supplier.
Other energy futures also fell. June gasoline futures fell 2.81 cents to settle at $2.8782 a gallon, and June heating oil futures fell 4.03 cents to settle at $3.1177 a gallon.
In precious metals, gold plunged to a four-month low near $850 as the jump in the dollar gave investors a reason to sell the metal traditionally viewed as a hedge against inflation.
Gold for June delivery dropped $14.20 to settle at $850.90 an ounce on the Nymex, after earlier falling as low as $848.50, the lowest since Jan. 2.
Other precious metals also traded lower. July silver fell 38.8 cents to settle at $16.205 an ounce on the Nymex, while July copper lost 21 cents to settle at $3.6945 a pound.
