US wheat futures added one percent on Friday as this week's plunge in prices stirred interest from importers and as grain and wider markets paused for breath after extreme volatility fanned by a crisis in Libya. Agricultural commodity prices have been shaken by political unrest in Libya and elsewhere in the Arab world that triggered a switch by funds to oil and safer-haven investments, and brought crop prices lurching back from 2-1/2 highs seen this month.
A string of wheat tenders this week, as major importers have sought to take advantage of lower prices, has helped the market to steady in the face of a wave of long liquidation, traders said. Weekly US export data gave a further sign of strong demand, with wheat volumes topping expectations, coming on top of European Union data on Thursday showing the biggest volume of wheat exports in six weeks.
"The pull-back in prices is flushing out demand," said Brett Cooper, senior manager, markets, FCStone Australia. "There's been plenty of tender business," he said, citing Saudi Arabia's tender to buy 275,000 tonnes of milling wheat. Grains also drew support from a general easing in tension across markets, with crude oil coming off highs and European stocks edging up.
Fears that violence in Libya will curb global oil output and choke economic growth has sent crude prices surging and other assets like stocks and food commodities tumbling. The most active wheat contract on the Chicago Board of Trade, May, ended the pre-US session up 1.05 percent at $7.91-1/4 per bushel, still well below a 2-1/2 year peak of $9.25-1/2 on February 9.
Trading in CBOT futures resumes at 1530 GMT with the US day session. In Europe, May milling wheat extended gains after the US export data, trading up 1.75 percent at 247.00 euros a tonne by 1352 GMT. "We're in a bit of a consolidation phase to try and see if the lower levels will be confirmed," one dealer said. Corn and soybean futures edged higher after trading flat earlier in the session.
Corn for May delivery, also the most active contract, was up 0.72 percent at $6.98-3/4, with much bigger than expected weekly exports giving scope for more gains in later US trade. May soybeans inched up 0.09 percent to $13.29. Fundamentals of tightening stocks and strong demand remained supportive longer term for grains but operators said it was hard to say how the market would react in the short term.
The US government said on Thursday US farmers this year would plant the second-largest amount of corn in nearly 70 years, but stocks next season would remain thin. Soybeans, which unlike corn and wheat were heading for a weekly gain on the back of Chinese demand and soaring oil prices, were also set to see tight stocks again next year, the US Department of Agriculture said. "The low level of inventories of the world's largest exporter of corn and soybeans makes prices vulnerable to further rises in the event of weather-related crop losses," Commerzbank analysts said in a note.