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U.S. grain futures trim gains as investors monitor dollar movement

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Shutterstock photo - - U.S. grain futures were higher on Thursday, albeit off the best levels of the session, as traders monitored the direction of the U.S. dollar to gauge the strength of demand for U.S. supplies.

The dollar index plunged to three-week lows of 94.77 on Wednesday, before rebounding to trade at 99.04 early on Thursday.

The dollar's losses came after the Federal Reserve dropped a reference to being "patient" on the timing of rate hikes, but added that the change in its forward guidance did not mean it has decided on the timing for an initial rate increase.

A weaker dollar increases the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment, while a stronger dollar weighs on the competitiveness of U.S. supplies on the export market.

On the Chicago Mercantile Exchange, US wheat for May delivery touched a session high of $5.2000 a bushel, the most since February 20, before trading at $5.1338 during U.S. morning hours, up 2.38 cents, or 0.46%.

A day earlier, the May wheat contract rose 7.2 cents, or 1.44%, to close at $5.1060 as concerns over the health of the winter-wheat crop supported prices.

According to the U.S. Department of Agriculture, Kansas winter wheat was rated 41% good to excellent, down from 46% in the previous week, while Oklahoma winter wheat was rated 40% good to excellent, compared to 42% in the previous week.

Meanwhile, US soybeans for May delivery inched up 5.53 cents, or 0.57%, to trade at $9.7113 a bushel after hitting an intraday peak of $9.8020.

On Wednesday, the May soybean contract hit $9.5340, a level not seen since October 21, before turning higher to settle at $9.6500, up 10.4 cents, or 1.1%.

Optimism over the outlook for supplies in Brazil and Argentina combined with indications over a slowdown in demand for U.S. soybeans drove down prices.

Brazil and Argentina are major soybean exporters and compete with the U.S. for business on the global market. Large South American crop prospects could weigh on demand for U.S. supplies.

Elsewhere on the Chicago Board of Trade, US corn for May delivery tacked on 2.52 cents, or 0.67%, to trade at $3.7713 a bushel. US corn for May delivery hit $3.6700 on Wednesday, the lowest level since January 30, before settling at $3.7460, up 3.6 cents, or 1.01%.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay. offers an extensive set of professional tools for the financial markets.

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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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