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Wheat Bounces Back on New Export Purchases

Wheat for December delivery rose 1.6% to $6.32 3/4 a bushel on the Chicago Board of Trade Friday in reaction to a new Egyptian tender as well as lingering weather issues in Russia.

— Soybeans for November delivery rose 0.9% to $10.83 3/4 a bushel.

— Corn for December delivery rose 0.7% to $4.19 1/4 a bushel.


Export Appetite: Wheat futures trading on the CBOT rose Friday, bouncing back from a weaker finish Thursday as Egypt seeks an international tender for wheat. Russian wheat priced at $262.97 a metric ton was the cheapest offer at an Egyptian international tender Friday, according to a lineup of offers seen by The Wall Street Journal. Egypt’s state grain buyer confirmed that it bought 165,000 metric tons of Russian wheat Friday at that price, more than what Egypt paid last month for Russian wheat.

Getting in Place: Traders piled into grains Friday on hopes that commodities have a compelling story to push them higher through the end of the year.

“Fresh commercial and speculative buying again emerged to buy wheat following yesterday’s price break, with Black Sea prices continuing to push higher amid lingering drought concerns,” said Arlan Suderman of StoneX. “Corn prices found support from more rumors emerging from China that it may raise its import quotas after the election, although buying ahead of the weekend remains limited thus far.”


Hungry Market: Grains traders have speculated that dry weather in South America will hurt soybean yields in Brazil, but whatever crop does get produced, the world seems to have a voracious appetite for it.

“Brazilian producers have already marketed a reported 55% of this year’s soybean crop,” said Karl Setzer of AgriVisor. “This is considerably higher than average as record returns were seen following currency exchange rate changes.”

Shift Into Reverse: The recent rallies in staple agricultural commodities may shift into reverse as stockpiling eases and high prices encourage planting in coming quarters, said Capital Economics. According to the firm, the global wheat market will remain in a comfortable surplus in its current season and stocks will reach a new record high, which will weigh on prices.

Corn and soybean prices have rallied strongly partly due to speculative demand but this is now overdone, Capital Economics said.


— The USDA is scheduled to release its weekly grain export inspections data at 11 a.m. EDT Monday.

— The USDA is due to release its weekly crop progress report for the 2020-21 crop at 4 p.m. EDT Monday.

— Beyond Meat Inc. is scheduled to release its third- quarter earnings after the stock market closes Monday.
Source: Dow Jones

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