Story
Chicago Wheat Rises on Saudi Arabian Tender, Signaling Renewed Demand
Summary
Wheat futures extended gains for a second day after Saudi Arabia announced a major import tender, suggesting that recent price drops are attracting international buyers. A strong dollar, however, continues to cap upward momentum.
Chicago wheat futures rose for a second consecutive session, moving further away from a multi-week low, after a new import tender from Saudi Arabia bolstered demand sentiment in the global market.
Saudi Tender Spurs Buying
Saudi Arabia announced on Thursday it is seeking to purchase 535,000 metric tons of wheat for shipment in November and December. Traders interpreted the move as a sign that the recent decline in wheat prices is beginning to stimulate fresh demand from key importers.
The tender is particularly notable because Saudi Arabia had canceled a previous tender on September 7, citing high prices at the time. The most-traded wheat contract on the Chicago Board of Trade (CBOT) was up 0.7% at $6.87-3/4 a bushel by 1155 GMT, recovering from a seven-week low of $6.70-3/4 reached on Thursday.
AdBroader Market Pressures
While the tender provided support, gains for U.S. wheat futures were limited by the continued strength of the U.S. dollar, which makes American commodities more expensive for holders of other currencies.
Other grains faced downward pressure. Corn futures remained near a six-week low after a U.S. Department of Agriculture (USDA) report on Wednesday showed larger-than-expected domestic stockpiles. Soybeans also declined as the U.S. harvest, which is projected to be the largest on record, continues to progress.
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Wheat Futures Hold Near Six-Week Lows as Strong Dollar Offsets Demand Signals
Chicago wheat futures traded near multi-week lows as the impact of a strengthening U.S. dollar overshadowed signs of fresh import demand. Corn and soybean futures also declined amid expectations of ample supply from the ongoing U.S. harvest.