By K.T. Arasu
CHICAGO, May 9 (Reuters) – Investors will get a strong dose of
fundamental trading points in grains this week from a set of government
data expected to point to growing stockpiles of corn and soybeans in the
United States.
The possibility of damage to the corn crop from freezing temperatures
that were forecast for the weekend of May 8-9 in the upper stretches of the
Midwest grain belt would also be in play.
The soaring U.S. dollar <.DXY>, which gained 3 percent against a basket
of six major currencies last week, will also hold sway over grain markets
as a stronger greenback usually makes exports from the United States less
competitive.
“We have to respect the outside markets. With the increase in the
dollar amid a flight to safe-haven assets and drop in oil, we (grains)
cannot be an island,” said grains analyst Joe Victor of Allendale Inc,
based in Illinois’ McHenry County.
He said the threat of contagion from Greece’s debt crisis to other
European economies will continue to overhang grains, as it would other
commodities and financial markets.
“There are concerns of what might happen to Spain, Portugal,” he said,
of two other indebted European nations.
U.S. stocks turned negative for the year on Friday amid fears the Greek
crisis could spread and affect other countries.
Grain futures have increasingly moved in tandem with financial markets
in recent years amid a strong build up in bets from investors and
speculators not linked to agriculture.
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