CHICAGO: US soybeans surged 2 percent on Friday, touching a 7-1/2 month high in the biggest daily gain in three weeks, as strong export demand from top soy buyer China and a weaker dollar helped prices rebound from sharp losses earlier this week.
Corn and wheat futures each fell sharply at the Chicago Board of Trade, posting steep weekly losses, pressured by beneficial growing weather in the United States and the lack of confirmation of an export sale to China.
Forecasts for smaller crops in South America also supported soybean futures, with benchmark CBOT May soybeans gaining 31 cents to $14.46-3/4 per bushel, and concluding its fourth straight weekly gain.
Argentina cut its official estimate for this year's soy and corn crops late on Thursday, and many traders expect the US Agriculture Department to slash its own estimates in the USDA's next supply-and-demand report due early next month.
"The other rumbling is the bean yields coming out of Argentina. As they get closer to 50 percent harvested, (they) are not getting better. And that has people concerned we may see this (Argentine) bean crop below 43 million tonnes," said Mark Schultz, analyst at Northstar Commodity Investments.
Argentina's Agriculture Ministry on Thursday pegged the soy crop at 42.9 million tonnes, compared to the latest USDA estimate of 45 million tonnes.
"There's still the idea that USDA is overestimating South American soy production and that's going to be supportive," Newedge USA analyst Dan Cekander said.
USDA this week confirmed 230,000 tonnes of US soybean sales to China, with another 225,000 tonnes sold to an unknown destination, thought by many traders to be China as well. US soy exports last week were the most in more than a month.
Also supportive was a weaker dollar, which hit a two-week low against the euro amid better-than-expected business sentiment in Germany. Losses in the greenback can make dollar-denominated commodities cheaper for holders of other currencies.
CBOT May corn settled 8-1/2 cents lower at $6.12-1/2 per bushel, a loss of 1.4 percent after having risen more than 3 percent on Thursday.
Corn futures had surged on ideas that China was purchasing US cargoes of the grain after prices slid to a three-month low earlier this week but the lack of an announcement by USDA of such a sale spurred Friday's sell-off and pushed down prices down 2 percent for the week.
A Reuters poll 11 analysts on Friday pegged corn seedings early next week at 29 percent, compared to 17 percent complete this week. USDA was also expected to release the first soybean planting progress in its weekly crop progress report due Monday and analysts predicted seedings at 4 percent done.
AgResource, in its daily letter to clients, said most argue that China secured 700,000 to 1.0 million tonnes of US old- and new-crop corn with Sinograin, COFCO and the privates all involved as buyers on Thursday.
Some even suggest that Sinograin has been given the "green light" to secure as much as 4.0 million tonnes of US corn when price and import profit are correct, AgResource said.
But USDA confirmed no such sale on Friday.
"There is no big threat with the weather at this time. So you have a market that has to live off either a weather problem, or some phenomenal demand," Schultz said.
"When you get ideas of big demand and it doesn't turn out to be real, we give it all back. It's disappointing because thought yesterday was a turnaround," he added.
Corn exports last week were the lowest in three weeks, the USDA said, while corn futures were on track to decline nearly 1.6 percent this week in the second straight week of falls.
CBOT May wheat lost 9 cents to $6.15-3/4 per bushel, shedding more than 1 percent for the week in the third straight weekly decline, pressured by recent rainfall in the soft red winter wheat belt in the eastern Midwest.
Beneficial growing weather in the hard red winter wheat belt in the southern US Plains also weighed on wheat futures, with Kansas City Board of Trade May wheat falling more than 1 percent.