Chicago soybeans rose 0.8 percent on Friday, boosted by bargain hunting in Asia, but the market is on track for its biggest weekly loss in a year, with a rapid U.S. harvest and expectations of higher yields weighing on the market.
Corn and wheat futures edged higher, tracking gains in soybeans, although the grain markets are facing their steepest weekly decline in more than three months.
U.S. farmers have started harvesting corn and soybeans at a brisk pace this year, which is adding seasonal pressure to prices, which jumped to all-time highs this summer as the worst drought in half a century ravaged crops across the U.S. Midwest.
The losses in corn and soybean markets are likely to be capped by extremely tight supplies that will face buyers until South American crops hit the market in March and April.
The wheat market is likely to find support from depleting stocks in Russia, the world's fourth largest exporter, after aggressive sales from its drought-hit harvest, and dryness hurting crops in Australia, the No. 2 exporter.
"I think the market is going to be reluctant to push prices anywhere near the highs that they reached in recent weeks as we are in the middle of the harvest and yield reports coming out are positive," said Victor Thianpiriya, agricultural strategist at ANZ bank in Singapore.
"Having said that, it is still well bid in the Asia Pacific session as we have seen a pick up in consumer business."
Chicago Board of Trade November soy rose 0.8 percent to $16.31-3/4 a bushel by 0332 GMT, while December corn added 0.2 percent to $7.47-3/4 a bushel. December wheat gained 0.3 percent to $8.82 a bushel.
November soybeans have lost 6.3 percent this week, the biggest weekly loss since September 25. December corn is down 4.4 percent, biggest weekly fall in more than three months and December wheat has given up 4.6 percent, steepest decline since early June.
HARVEST PRESSURE
Corn spot basis bids were steady to lower around the U.S. Midwest on Thursday, with the basis falling to a six-month low at a closely-watched
processor in central Illinois, as farmers delivered freshly harvested supplies.
The market is also watching corn and soybean planting conditions in South America, where production is expected to replenish global supplies in early 2013. Any production issues in Brazil and Argentina could provide a fresh bullish momentum to the markets.
Argentina's 2012/13 corn season, which many analysts think could yield a record harvest, has got off to a good start as moist fields spur seeding, the Buenos Aires Grains Exchange said.
Argentina is the world's second-biggest supplier of corn after the United States and ideal sowing conditions and high global prices have revived farmer interest in growing the grain.
The wheat market is likely to find support from adverse weather threatening crops in Australia and lower supplies from Russia.
The winter wheat crop in the southern U.S. Plains needs rain to establish itself, and conditions are dry in Australian wheat-producing areas.
Russia's grain exports will start to decline in October as stocks are falling quickly, supporting domestic prices and increasing the possibility of import from its ex-Soviet neighbours, SovEcon agricultural analysts said.
In September Russia is expected to export 3.0 milliion to 3.1 million tonnes of grain, including flour equivalent and legumes, up from 2.9 million tonnes seen in August, according to SovEcon.
Prices at 0332 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 882.00 2.50 +0.28% +0.46% 892.78 55
CBOT corn 747.75 1.75 +0.23% -0.03% 796.79 32
CBOT soy 1631.75 13.00 +0.80% -2.23% 1695.23 34
CBOT rice $15.22 $0.03 +0.20% -0.46% $15.44 59
WTI crude $93.00 $0.58 +0.63% +1.11% $95.51 36
Currencies
Euro/dlr $1.298 -$0.007 -0.54% -1.08%
USD/AUD 1.047 0.001 +0.13% -0.08%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
