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GRAINS-Soybeans drop to 3-year low as firmer dollar dents US competitiveness

Credit: REUTERS/RODOLFO BUHRER

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CANBERRA, Feb 14 (Reuters) - Chicago soybean futures fell to a three-year low on Wednesday due to plentiful supply and a strengthening U.S. dollar that made U.S. agricultural products less attractive to importers.

Corn futures also dipped to a three-year low, with the market well-supplied by a record U.S. crop, while wheat dropped by more than 2% amid pressure from declining Russian export prices.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.8% at $11.76-3/4 a bushel by 0619 GMT after touching $11.76, the lowest since December 2020.

The U.S. dollar shot to a three-month high against a basket of major currencies on Tuesday after data revealed higher-than-expected U.S. inflation in January. USD=FRX/MKTS/GLOB

"The dollar index has risen dramatically, causing U.S.-origin grains and oilseeds to look expensive," said Andrew Whitelaw at agricultural consultants Episode 3.

Analysts expect the U.S. soybean crush to have slowed in January as frigid weather disrupted operations at processing plants, reducing local demand.

Commodity funds - which hold large net short positions in U.S. grain futures - were net buyers of Chicago corn but net sellers of soybeans and wheat on Tuesday, traders said.

A drop in crop prices and rising production costs are set to slash U.S. net farm income this year.

France's farm ministry reduced its estimates of winter grain sowing, with the soft wheat area seen at its second lowest in 30 years, after heavy rain disrupted field work.

Farmers in Ukraine, a major global corn grower and exporter, are expected to reduce the area sown with corn by 9% year-on-year in 2024, an agriculture ministry survey showed.

Ukraine is on track to export all grain from its 2023 harvest despite Russian attacks on Ukrainian ports and infrastructure, Britain's foreign office said.

(Reporting by Peter Hobson; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

((peter.hobson@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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