Corn and soybean futures run into strengthening U.S. currency

WINNIPEG – The growing currency crisis in Turkey is starting to impact other economies throughout the world, and by extension commodities like soybeans and corn.

As the Turkish lira drops in value many investors have begun to put their money into the United States currency. It’s a common move when markets are troubled as the American greenback is generally regarded as the world’s reserve currency. The Russian ruble, Indian rupee and South African rand have all weakened in recent days.

The U.S. dollar is currently on an upward trend, but while that may be good news for importers it isn’t helping everyone.

“Traders realize the U.S. dollar may start to hinder U.S. agriculture products,” said Terry Reilly, senior analyst with Futures International LLC in Chicago.

He said soybeans are currently locked in a choppy US$8.35 to US$9.00 per bushel range.

Corn futures are showing some technical strength, as the 50-day moving average traded lower than the 20-day moving average this week.

“Now that those averages crossed themselves yesterday it could signal bullish momentum on the technicals,” explained Reilly.

The support comes at a welcome time as a bearish USDA report on Friday, and spillover weakness from wheat continue to pressure the corn market.

“So basically a tug of war between wheat and bean prices could lead to a sideways trading range for corn,” he said.

One thing that could boost corn prices is if the USDA were to lower its yield numbers in its next report.

“In addition, the short (corn) crop in Brazil which was caused due to late season drought,” he said. “This could spur U.S. exports.”

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