By Kirk Maltais

--Wheat for December delivery rose 4.1% to $7.55 1/4 a bushel on the Chicago Board of Trade Friday as traders digested yesterday's USDA grain stocks report with optimism that demand for U.S. wheat is on the upswing.

--Corn for December delivery rose 0.9% to $5.41 1/2 a bushel.

--Soybeans for November delivery fell 0.8% to $12.46 1/2 a bushel.

HIGHLIGHTS

Robust Demand Hopes: Wheat was buoyed by both yesterday's grain stocks report from the USDA that showed a larger-than-expected cut to wheat stocks and indications that Russia may further restrict exporting of wheat, leaving room for other producers like the U.S. to sell more. "Russia could severely restrict wheat exports due to production lost to drought and those ideas have kept demand hopes for U.S. wheat alive," said Jack Scoville of Price Futures Group.

Soybean Surprise: Traders were also focused on soybeans in the wake of Thursday's grain stocks report. "By far the biggest surprise was soybeans and it really does change the landscape moving forward," said Richard Buttenshaw of Marex Spectron, adding that higher stocks amid an upward revision in U.S. production was unexpected by traders and analysts. "[I] think soybeans follow through with the move yesterday and push lower again today and over the next couple of weeks until we find the China bid."

INSIGHTS

Helping Hand: Although yesterday's grain stocks report did not contain much exciting news for U.S. corn - futures turned higher today supported in large part by the strength in wheat. "The higher wheat market is supportive of corn as wheat feeding played a role in the disappointing corn usage data on yesterday's report," said Doug Bergman of RCM Alternatives. Mr. Bergman forecasts that the upside for corn right now appears limited - as does the downside, which is expected to attract new buyers.

Oil Driver: Higher crude oil prices this week helped power agricultural prices, according to Capital Economics. "Earlier in the week, the rise in the oil price had supported the prices of agriculturals, particularly those used to make biofuels, but the oil price rally subsequently fizzled out," said the firm. Later in the week, the focus for traders turned to Thursday's quarterly grains stock report, showing higher-than-expected inventories for corn and soybeans. WTI light crude oil finished trading up 1.1% to nearly $76 per barrel today.

AHEAD:

--The USDA will release its weekly export inspections report at 11 a.m. ET Monday.

--The USDA will release its weekly crop progress report at 4 p.m. ET Monday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

10-01-21 1549ET