Wheat drops 3% to three-week trough, dollar scales year peak

Wheat futures fell nearly three percent in American trade to July 27 lows as the dollar index hit June 2017 highs, as dollar-denominated commodity futures become costlier to holders of other currencies. 

As of 07:51 GMT, wheat futures due in December tumbled 2.81% to $5.5350, marking three-week lows, while the dollar index inched up 0.05% to 96.40, touching 13-month highs. 

USDA Reports Supply, Inventory Forecasts 

Last week, the US Department of Agriculture released its monthly report on global supply and demand, at which it cut forecasts for supplies and inventories for the market year ending next May. 

The USDA cut forecasts for wheat output by 4 million bushels to 1.877 billion, which would still be up 8% from 2017.

Winter harvest is estimated at 1.19 billion bushels, down 6% from the previous year, while spring harvest is estimated at 614 million, up 48% from 2017. 

The USDA expects US wheat exports in the current marketing year to rise by 50 million bushels to 1.025 billion bushels, amid forecasts of cuts in European exports due to drought.

Inventories are estimated to drop 15% from last year to 935 million bushels, while raising price forecasts by $0.1 to a range of $4.6 to $5.6. 

Otherwise, US President Donald Trump warned Canada in another tweet while lauding Mexico by saying: "Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal. New President of Mexico has been an absolute gentleman. Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!".

Trump has repeatedly blasted the NAFTA trade deal with Mexico and Canada, describing it as the worst in US history and blaming it for harming US farmers and workers.