NEW YORK (AP) — Wheat prices climbed sharply Friday for a second session amid signs of strong demand from buyers abroad. Egypt locked in supply, and India hinted at future purchases.
Other agricultural futures advanced, while energy and precious metals prices declined.
Wheat demand appears robust at a time when supplies are exceedingly tight. With crops in the Southern Hemisphere troubled by poor weather conditions, buyers worldwide have moved to stock their supply shelves.
Egypt's primary wheat buyer, the state-owned General Authority for Supply Commodities, has bought 115,000 metric tons of Russian wheat, according to a Dow Jones Newswires report on Friday. The wire service also reported a senior government official as saying the India State Trading Corp. may buy up to 550,000 metric tons in its tender to be floated Monday.
Two major grower nations, Australia and Argentina, have had problems with their crops this year. A drought in Australia cut back wheat production severely, while a frost in Argentina led that country this week to put a hold on export registrations to protect domestic supply.
A bushel of wheat for March delivery surged 30 cents — the daily permitted price swing — to end at $9.215 on the Chicago Board of Trade.
"One of these days, prices will certainly slow demand, but nobody thinks that is happening today," said John Roach, president of Roach Ag. Marketing Ltd., in a note to clients.
Wheat remains off its high of $9.6175 a bushel reached in late September.
March corn gained 5.25 cents to $4.1725 a bushel, while January soybeans jumped 21 cents to $11.1975 a bushel.
A falling U.S. dollar also helped bolster demand for agricultural products.
The greenback slipped against other major world currencies after a report of weaker job growth last month provided further motive for the Federal Reserve to lower interest rates at Tuesday's meeting.
The nation's employers added 94,000 jobs to their payrolls in November, down from 170,000 in October, according to the Labor Department's monthly report. The unemployment rate held steady at 4.7 percent.
Investors widely expect the Fed will roll back its benchmark federal funds rate, and the main debate now surrounds the size of the cut. Most analysts expect the central bank will shave a quarter point off the rate, which currently stands at 4.50 percent; a minority is projecting a half-point cut.
Concerns about the economy, including the tepid jobs growth, have eroded investor confidence and pressured the markets for oil and other raw materials.
"There are so many people on the fence about the economy. It dovetails back to what will happen with energy," said Alan Lammey, energy analyst with EIG Inc. in Houston.
Energy futures fell broadly. Light, sweet crude for January delivery dropped $1.95 to settle at $88.28 a barrel.
Given the economic concerns, "I think we're probably going to see crude oil remain very tied to about $85 a barrel, up to $95 a barrel," through year-end, Lammey said.
