Chicago wheat futures climbed for a second consecutive session on Friday, moving away from a seven-week trough after a fresh round of import demand from Saudi Arabia. By 1155 GMT, the most-active contract on the Chicago Board of Trade was up 0.7% at $6.87-3/4 a bushel, recovering from Thursday's seven-week low of $6.70-3/4.
Traders said the improvement in sentiment followed an announcement that Saudi Arabia is seeking to purchase 535,000 metric tons of wheat for shipment in November and December. Market participants interpreted the tender as evidence that the recent slide in prices was beginning to trigger new buying interest, noting that Riyadh had cancelled a prior wheat tender on September 7 because prices were deemed too high.
Despite the uptick in wheat, gains were restrained by the continued strength of the U.S. dollar. The firm currency tends to make U.S. commodities more expensive for holders of other currencies, placing a ceiling on advances in U.S. grain prices.
The broader grain complex produced mixed signals Friday. Corn futures slipped and remained near a six-week low after a larger-than-expected U.S. corn stock estimate from the U.S. Department of Agriculture on Wednesday weighed on the market. The heavier stocks estimate suggested more available supply than traders had anticipated, applying downward pressure to prices.
Soybeans also moved lower, pressured by an ongoing U.S. harvest that is projected to be the largest on record. Traders cited the harvest pace and expectations for abundant supplies as headwinds for soybean prices.
Beyond crop-specific drivers, investors were awaiting the monthly U.S. jobs report for indications about possible shifts in U.S. interest rate policy. That macroeconomic data point is being watched for its potential to influence the dollar and, by extension, commodity price dynamics.
In summary, the Saudi wheat tender provided an immediate boost to Chicago wheat futures, but a combination of a strong dollar and mixed supply signals across corn and soybeans kept broader gains in check. Market participants remain focused on upcoming economic data that could affect interest rate expectations and currency moves, factors that in turn influence commodity markets.
Key statistics reiterated:
- Chicago most-traded wheat: up 0.7% at $6.87-3/4 a bushel by 1155 GMT.
- Prior day low: $6.70-3/4, a seven-week low recorded on Thursday.
- Saudi Arabia tender: seeking 535,000 metric tons of wheat for November-December shipment; prior tender cancelled on September 7 due to high prices.
- Corn: near a six-week low after Wednesday's larger-than-expected USDA U.S. corn stocks estimate.
- Soybeans: falling amid an ongoing U.S. harvest projected to be the largest on record.