Wheat falls off three-year peak, dollar flat as the week wraps up

Wheat futures fell for the first time in five sessions off July 7, 2015 highs, still on track for the third weekly profit in a row, while the dollar index backed off two-week highs, following earlier data from the US, the world's second largest wheat exporter, and amid dry weather and heat waves in the US. 

As of 07:51 GMT, wheat futures due on December 15 fell 0.51% to $5.7975, while the dollar index barely inched down 0.02% to 95.15 away from July 19 highs. 

USDA Reports Sales, Harvest Forecasts 

The US Department of Agriculture is forecasting US winter wheat harvest to reach 657 million bushels in the marketing year starting last June, down from 750 million last year, and for spring wheat to amount to 584 million, up from 385 million last year. 

The USDA also reported sales of new wheat product due for delivery in the new marketing year at 382.5 thousand tonnes in the week ending July 27, down 1% from the previous week, while 21% above four-week averages. 

Taiwan came at the top of the buyers list at 104.9 thousand tonnes, followed by Philippines at 104.0 thousand, while Indonesia and Sri Lanka bought 70.0K and 60.0K respectively, with Mexico accounting for 30.7 thousand tonnes.  

It's worth noting that wheat futures surged to three-year highs at $5.93 on Thursday after reports that Ukraine is limiting its grain exports due to the drought hitting Europe and Russia recently.

US Labor, Services Data 

Earlier US data showed the unemployment rate fell to 3.9% as expected from 4.0% in June, while average hourly earnings rose 0.3% as expected, up from 0.1% in June. 

The economy added 157 thousand jobs last month, down from 248 thousand in June, and missing estimates of 191K, as the trade deficit rose to $46.3 billion from $43.2 billion in May, below estimates of $46.5 billion. 

The US ISM services PMI fell to 55.7 in July from 59.1 in June, missing estimates of 58.6, while the trade deficit widened to $46.3 billion in June from $43.2 billion in May, below estimates of $46.5 billion. 

Services PMIs are crucial as services constitute two thirds of American GDP, with the indices covering healthcare, finance, housing, retail, and many other sectors in the economy, and they usually have bearing on the Federal Reserve's policy decisions later