Soybean futures advanced for a third straight day, supported by China buying 180,000 tonnes, but prices slipped from early highs as Informa raised its US soy crop outlook at midmorning.
Trading was choppy as investors squared positions before the weekend and ahead of next week's monthly US Department of Agriculture crop production report.
"We're getting some positioning before the weekend and ahead of the Oct. 11 (USDA) report. We've seen a decent rebound in soybean prices and guys are moving to the sidelines," said Brian Basting, analyst with Advance Trading.
"Corn harvest is nearing 70 percent nationwide and farmers are moving on to soybeans, though soybeans are going to be slowed for a couple of days because of some rain," he said.
Informa Economics said on Friday it expects USDA to raise its US corn production forecast to 11.194 billion bushels, based on a yield of 127.0 bushels per acre. Soybean production was seen at 2.86 billion bushels, based on a yield of 37.8 bushels per acre.
The firm previously forecast the corn crop at 11.093 billion bushels, yielding 126.6 bushels per acre, and a soy crop of 2.663 billion bushels with yields at 35.2 bushels.
Soybean prices fell to a three-month low this week, almost $3 a bushel below the all-time high posted just a month ago. The price drop has renewed demand for the oilseed, stoking concerns that demand was not being rationed enough to maintain a stocks cushion this season.
Chinese importers bought 180,000 tonnes of US soybeans for shipment in the 2012/13 marketing year, USDA said on Friday. Traders were encouraged by the purchase because Chinese demand has been slow all week as markets there were closed for a national holiday.
The announcement also came a day after USDA said US soybean export sales jumped to a three-month high last week.
"China is on holiday but we did have a purchase today, which tells us we're back at some sort of value price," said Don Roose, president of US Commodities.
"The trade is concerned that if we weren't rationing almost $3 ago then we sure aren't rationing now," he said, referring to the drop in soybean prices from a month ago.
Chicago Board of Trade November soybeans climbed 12-1/2 cents, or 0.8 percent, to $15.64 per bushel by 11:35 a.m. CDT (1635 GMT). Due to sharp drops earlier in the week, soybeans were set for a third consecutive weekly decline for the first time in a year.
CBOT December corn fell 6 cents, or 0.8 percent, to $7.51 per bushel. December wheat futures followed corn lower, shedding 5 cents, or 0.6 percent, to $8.64-1/4 per bushel.
Corn was poised for its fourth weekly decline in five weeks while wheat's more-than-4-percent drop this week was the steepest since late July.