February 3, 2020 / 3:41 AM / 18 days ago

GRAINS-Wheat falls for 7th session to 4-week low on stronger dollar

* Wheat drops to lowest since Jan. 8 on strong dollar

* Soybeans unmoved after dropping to a two-month low

* China’s Dalian agriculture futures drop as markets reopen (Recasts with wheat, adds quotes in paragraphs 3, 9-10)

By Naveen Thukral

SINGAPORE, Feb 3 (Reuters) - Chicago wheat futures slid for a seventh consecutive session on Monday, dropping to a near four-week low, as a stronger dollar dented U.S. export prospects.

Soybeans were little changed after hitting a two-month low earlier in the session on fears that a rapidly spreading coronavirus will reduce demand from top oilseed importer China.

“The stronger greenback is challenging for wheat prices,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

U.S. wheat is already facing stiff competition from suppliers in the Black Sea region and Europe.

Against a basket of currencies, the dollar index rose 0.1%. A stronger dollar makes U.S. commodities expensive for buyers holding other currencies.

The most-active wheat contract on the Chicago Board of Trade lost 1% to $5.48-1/2 a bushel by 0312 GMT, after dropping earlier in the session to its lowest since Jan. 8 at $5.47 a bushel.

Soybeans were unchanged at $8.72-1/2 a bushel after falling to $8.71 a bushel, the weakest since Dec. 3, while corn lost 0.3% to $3.80 a bushel.

China’s central bank unexpectedly lowered the interest rates on reverse repurchase agreements by 10 basis points, as authorities stepped up measures to relieve pressure on the economy from the rapidly spreading virus outbreak.

“China’s policy makers are preparing as best they can, promising oodles of liquidity and other supports to prevent disruption,” said Gorey.

“Even so, it would seem inevitable that China’s markets are going to have a tough Monday.”

The death toll from the new coronavirus in China’s Hubei province rose by 56 to 350 on Monday, Chinese state television reported citing official figures.

China’s agriculture futures traded on the Dalian exchange slid on concerns over demand as markets opened following an extended Lunar New Year break.

Soybean oil and palm oil fell by the daily limits, while soybeans and soymeal lost 2% and 3%, respectively.

The U.S. Agriculture Department said on Friday morning that private exporters reported the sale of 134,000 tonnes of corn for delivery to South Korea in the 2019/20 marketing year.

Large speculators trimmed their net short position in CBOT corn futures in the week to Jan. 28, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, cut their net long position in CBOT wheat and increased their net short position in soybeans. (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)

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