CHICAGO U.S. corn futures rallied to a two-week high on Friday, posting their biggest weekly gain in more than a year as tight supplies and worries about crop-stressing weekend weather offset pressure from a firm dollar and weaker financial markets.
Wheat fell nearly 2 percent for the day as the same hot, dry weather that lifted corn was seen supporting a brisk harvest pace for the winter crop, but prices were higher on the week.
Soybeans fell for the day. But the oilseed notched its biggest weekly gain since March after a three-day rally, the strongest in nearly eight months, boosted by tight stocks and strong export demand from China.
Corn turned higher at midmorning, bucking early pressure from worries about a deepening euro zone debt crisis and slower economic growth in Germany and China that pressured broader financial markets and lifted the dollar. <MKTS/GLOB>
Temperatures are expected to reach the 90s (Fahrenheit) in much of the Corn Belt this weekend with only light rains, extending a crop-stressing pattern that has raised worries that yields may not live up to initial forecasts.
"The early attempt to push corn down fell flat. There are growing production concerns about the weather remaining dry and temperatures rising across much of the central U.S. this weekend," said Shawn McCambridge, analyst with Jefferies Bache.
"Wheat is heading into a harvest weekend. The same hot, dry conditions that are concerning corn are benefiting wheat, bringing the grain to harvestable levels in terms of moisture and supporting a rapid pace of harvest."
Chicago Board of Trade July corn rose for a third straight session, gaining 4 cents to $5.98 per bushel, a 0.7 percent daily rise and an 8.4 percent weekly jump that was the largest since May 2011. New-crop December corn added 7-1/2 cents, or 1.4 percent, to settle at $5.44 a bushel.
"We've been coming up short on the rain. The last seven days have not been that abundant on moisture so I would assume we could have crop ratings decline," said Mark Schultz, chief analyst with Northstar Commodities.
Soybeans slid despite a U.S. Department of Agriculture announcement on Friday that private exporters had sold 530,000 metric tons (584,225 tons) of U.S. soybeans, mostly to China. <ID:L1E8H826Q>
Hot, dry Midwest weather could also stress recently planted soybeans, but the more advanced corn crop is more vulnerable than soybeans, which have plenty of time to recover.
CBOT July soybeans fell 1-3/4 cents, or 0.1 percent, to $14.26-1/4 per bushel while new-crop November shed 8-3/4 cents, or 0.7 percent, to $13.32-1/2. The spot contract gained 6.1 percent for the week, its strongest gain since mid-October.
CBOT July wheat dropped 11-1/2 cents to $6.30-1/4 a bushel, down 1.8 percent on the day but up 2.9 percent in the week.
Commodity funds bought a net 8,000 corn contracts on Friday and sold 4,000 soybean contracts and 3,000 wheat contracts, trade sources estimated.
Grains investors will now be turning their attention to next week's USDA monthly crop production and stocks reports which will be released early Tuesday.
Analysts expect the government to tighten its U.S. corn and soybean ending stocks estimates for the current marketing year, while likely also trimming its forecast for U.S. winter wheat production.
Prices at 1:50 p.m. CDT (1850 GMT)
LAST NET PCT YTD
CHG CHG CHG CBOT corn 598.00 4.00 0.7% -7.5% CBOT soy 1426.25 -1.75 -0.1% 19.0% CBOT meal 429.80 4.30 1.0% 38.9% CBOT soyoil 49.46 -0.93 -1.9% -5.0% CBOT wheat 630.25 -11.50 -1.8% -3.4% CBOT rice 1405.00 -17.50 -1.2% -3.8% EU wheat 209.50 0.00 0.0% 3.5%
US crude 84.37 -0.45 -0.5% -14.6% Dow Jones .DJI 12,532 71 0.6% 2.6% Gold 1593.56 4.41 0.3% 1.9% Euro/dollar 1.2513 -0.0048 -0.4% -3.3% Dollar Index .DXY 82.4760 0.4250 0.5% 2.9% Baltic Freight .BADI 877 5 0.6% -49.5%
(Additional reporting by Naveen Thukral in Singapore, Nigel Hunt in London; Editing by Jane Baird, David Gregorio and Dale Hudson)