* Corn snaps five-session rally, fails to hold above $4
* Soybeans, wheat also trade lower
* U.S. dollar index at near two-month high
U.S. grain and soy futures dipped on Thursday as gains in the dollar prompted investors to take profits after recent rallies. Nearby soybeans retreated after climbing on Wednesday to levels not seen for a front-month contract since September 2014, while nearby corn fell a day after touching its second-highest level since July. Soybeans “are beginning to look a bit tired,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. And “corn is becoming a bit overbought,” he said.
The nearby and most-active corn contract on the Chicago Board Of Trade fell 2.6 percent to $3.89 a bushel by 1530 GMT. Wheat lost 2.7 percent to $4.67 a bushel, and soybeans gave up 1.1 percent to $10.63-1/4 a bushel. The stronger U.S. dollar makes commodities, traded on a dollar basis, more expensive for buyers holding other currencies. The dollar index, measured against a basket of currencies, hit a near two-month high, furthering its gains from the previous session.
Outside investors, who have helped push up grain prices with recent buying, will be sidelined until the dollar rally abates, said Rich Feltes, analyst for broker RJ O’Brien. Also, global grain supplies are large, adding pressure on prices. “Wheat bears continue to talk about a glut of cheap feed wheat and how both global and domestic supplies are ridiculously large,” said Kevin Van Trump, chief executive of Missouri agricultural consultancy Farm Direction. The U.S. Department of Agriculture on Thursday reported export sales of U.S. wheat in the latest week at 175,200 tonnes for 2015/16, in line with trade expectations, and 573,500 tonnes for 2016/17, above expectations. Export sales of corn and soy also met or exceeded analysts’ estimates.
