OREANDA-NEWS. February 05, 2015. US wheat futures rose 0.8 percent on Wednesday, extending two day of gains to around 5 percent, as signs of more demand drove prices to their highest in the last week after big purchase tenders.

Soybeans and corn were weaker after strong rises on Tuesday.

"Wheat is being supported by the extra global export demand we have seen emerging this week with a series of major wheat purchase tenders," said Frank Rijkers, agrifood economist at ABN AMRO Bank. "Falling crude oil prices and the stronger dollar are weakening soybeans and corn."

"Crude oil prices and the dollar's exchange rate are currently taking an especially strong influence on grains and soybean markets."

Crude oil fell again on Wednesday on renewed concerns over global demand and high stock levels halted a rally that pushed up prices by about 19 percent over the past four sessions. The dollar also rebounded on Wednesday.

Chicago Board of Trade March wheat was up 0.8 percent at \\$5.18 a bushel by 1115 GMT, after touching a session peak of \\$5.21-34 a bushel, the highest since Jan. 27. Wheat had closed up 4.3 percent on Tuesday.

March corn fell 0.06 percent to \\$3.85-1/2 a bushel, having risen 4.3 percent in the previous session. March soybeans fell 0.4 percent to \\$9.83 a bushel after rising 2.9 percent on Tuesday.

"Wheat is being underpinned by the stronger global demand seen after wheat dropped to four-month lows earlier in the week," Rijkers said. "We have seen purchases and tenders from countries including Saudi Arabia, Egypt, Iraq, Jordan, Bangladesh and South Korea."

Egypt's state buyer on Tuesday bought 300,000 tonnes of wheat while Saudi Arabia said on Monday it bought 690,000 tonnes of wheat in a tender.

Jordan and Bangladesh are each tendering for 100,000 tonnes of wheat, Iraq is seeking at least 50,000 tonnes and a South Korean mill bought 50,000 tonnes from Australia on Wednesday.

SOYBEANS

"Soybeans are receiving downward pressure from falling crude oil and the stronger dollar and also positive weather forecasts in South America," Rijkers said. "The forecasts would be good for the soybean harvest now starting in Brazil, where a record crop is expected."

"Corn...is also being hit by falling crude oil prices and the stronger dollar."

A stronger dollar makes commodities priced in the currency more expensive for holders of other currencies. A weaker crude oil price has a knock on effect on prices for biofuels, which both corn and soyoil are used to produce.

The US Department of Agriculture has cut the outlook for the Brazilian soybean crop due to drought, but a record Brazilian crop is still expected.