CHICAGO - U.S. corn and wheat rose on Friday, extending steep gains from the previous session on technical buying while soybeans were little-changed as large export sales of soybeans to China kept prices near the highest levels in more than a month.
Thursday's rally in grains at the Chicago Board of Trade was tied to a steep drop in the dollar, which eased from a 12-year high against a basket of currencies. The dollar firmed on Friday following a better-than-expected U.S. jobs report, but grain prices continued to rise, with wheat rebounding from a 5-1/2 year low reached earlier this week.
"Much of what we are seeing is technical short covering," Karl Setzer, analyst at MaxYield Cooperative said in a note to clients.
Some investors were taking profits on earlier short, or bearish, positions. Traders also were squaring their books ahead of a U.S. Department of Agriculture monthly supply and demand report due on Wednesday, in which the government was expected to slash its soy supply forecast and boost its corn and wheat supply outlook, a Reuters analyst poll showed.
Open interest in wheat futures tumbled by 10,000 contracts during Thursday's rally, which was the biggest in a month, suggesting the investor short covering.
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CBOT wheat for March delivery was up 3-3/4 cents to $4.82-1/2 cents and CBOT March corn up 2-3/4 cents to $3.79-3/4 as of 11:07 a.m. CST (1707 GMT). Wheat was on pace to gain 0.3 percent for the week and corn 2.6 percent.
Soybeans for January delivery were flat at $8.97-1/2 per bushel, with the psychological threshold of $9 providing some upside resistance. Still, soy prices were on track for a weekly jump of 2.7 percent, the biggest since August.
USDA earlier said exporters sold 427,000 tons of U.S. soybeans within the last 24 hours, more than half of which to top importer China and the remainder to unknown destinations.
"The overnight sales are a good sign that the Chinese are still here, and they haven't stopped buying," said Rice Dairy analyst Jerry Gidel.
