Grains Stronger in the Overnight Session

Grains were stronger overnight adding to yesterday’s double-digit gains. In outside markets, equity futures, the US dollar and crude oil were also higher

Grains were benefiting from a short-covering rally, fueled in part by a pick-up in wheat trade as well as stronger than expected corn basis as farmers are slow to sell in the cash market. Yesterday’s deal for 1 MMT of wheat between Syria and Russia helped ignite a 20-cent move in the wheat market and this morning Dec wheat closes in on resistance at $4.25, a price level not seen since late August.

Overnight, Algeria's state grains agency bought 450,000 to 500,000 MT of milling wheat from optional origins in a tender which closed on Thursday.It has been widening its sources of wheat in recent months after its traditional supplier France suffered weather damage to its harvest this year.

This morning’s USDA export sales report showed better than expected soybean sales of 1.4 MMT, topping expectations which ranged from 0.9 to 1.2 MMT. Corn came in at the low end of expectations while wheat was at the upper end of expectations.

Global stocks and the dollar edged up on Friday, erasing some losses from the previous day, as stronger-than-expected Chinese inflation data eased some concerns about the health of the world's second-biggest economy. The US dollar index rose 0.3% but is off slightly from a seven month high touched on Thursday. Retail sales data and remarks from Federal Reserve Chair Janet Yellen and Boston Federal Reserve President Eric Rosengren were due later in the day. The Fed's minutes from its September meeting prompted investors to raise their bets on a December rate rise, and fuelled the rally in the greenback this week.

WEEKLY EXPORT SALES

Actual Expected

Corn 873 800-1,100

Soybeans 1,417 900-1,200

Wheat 491 350-550

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—Kevin McNew