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Saudi buy buoys wheat futures

Jeff Caldwell 11/04/2013 @ 11:01am Multimedia Editor for Agriculture.com and Successful Farming magazine.

Wheat futures gained after Saudi Arabia's grain agency announced Monday that the country had bought 720,000 metric tons of the grain from several sources including the U.S. Corn was little changed while soybeans gained.

The grain purchased by the Middle Eastern country is for shipment between January and March, according to the Grain Silos and Flour Mills Organization on Monday. The wheat shipments will be in 12 consignments of 60,000 tons with origins in the U.S., Europe, South America, and Australia.

Overseas buyers have committed to purchase 20.5 million tons of wheat from the U.S. since the start of the marketing year on June 1, up 39% from the same time frame a year earlier, according to the Department of Agriculture. Actual shipments of the grain have risen 47% to 15.4 million tons, according to the USDA.

"Saudi Arabia bought quite a bit of wheat, and that gave us the overnight surge" in prices, said Darrell Holaday, president of Advanced Market Concepts in Wamego, Kansas. "The interesting thing about the Saudi buy was that they bought, I believe, generally higher quality protein. They bought from a lot of different sources, but one thing we bring to the table is quality."

Chicago Board of Trade wheat futures for December delivery gained 3/4 cent, or 0.1%, to $6.68 1/4 a bushel in Chicago.

Corn futures for December delivery were unchanged at $4.27 1/4 a bushel. The price earlier fell to the lowest intraday price for the front-month contract since Sept. 1, 2010.

Soybean futures for November delivery on the CBOT fell gained 3 1/2 cents, or 0.3%, to $12.69 1/2 a bushel.

Trading is quiet ahead of Friday's USDA supply-and-demand report, the agency's first since September. The October crop report was canceled due to the partial government shutdown. Futures may have found an "equilibrium," as supply and demand fundamentals are in line with prices, Mr. Holaday said.

"For a while, this seems like prices are at a reasonable level," he said.


Write to Tony Dreibus at tony.dreibus@wsj.com
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(END) Dow Jones Newswires
November 04, 2013 10:33 ET (15:33 GMT)
DJ Wheat Gains After Saudi Arabia Announces Grain Purchase->copyright

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