US wheat futures rose 3 percent on Friday, ending the week higher on production worries and a setback in the dollar that helped insulate grain markets from fears that the United States could slip into another recession. Spring wheat futures on the Minneapolis Grain Exchange drove the wheat market. MGEX wheat soared on firming cash markets and talk of poor yields as the spring wheat harvest expands in the northern US Plains.
--- Corn, soya up on weak dollar, fears about crop prospects
The spot MGEX September spring wheat contract settled up 34-1/2 cents at $9.45-1/2 per bushel, gaining against back months on spreads. The contract rose 3.8 percent, its biggest single-day jump since mid-May. Chicago Board of Trade spot wheat ended up 3.3 percent. "There is absolutely nothing for sale," said Charlie Sernatinger, analyst with ABN Amro in Chicago, referring to the cash market for spring wheat.
Supplies of US high-protein spring wheat have been tight for months, and the 2011 harvest that traders hoped would replenish grain bins is running a few weeks later than normal after widespread planting delays. The MGEX September contract "is outrunning everything else because harvest was pushed back, and some shorts are getting out of September," one Minneapolis cash trader said.
The MGEX wheat market is inverted, with the spot September contract trading at a premium of about 25 cents over the December - a classic sign of tight supplies. "The inversion tells you that spring wheat stocks have come down and the production isn't up to par," the source said. Also bullish, the US dollar index dipped about 0.4 percent as the greenback fell to a record low against the yen on speculation authorities will not halt the Japanese currency's surge. A weak dollar tends to lift dollar-denominated grains by making them more affordable to foreign buyers.
At the CBOT, most-active December soft red wheat settled up 22 cents at $7.61-1/4 per bushel. December corn ended up 12-1/4 cents at $7.25-1/4 and November soybeans ended up 7-1/2 cents at $13.68-1/2. For the week, CBOT wheat was up 4 percent, while corn rose 3.3 percent and soybeans rose 2.4 percent - while the Dow fell 4 percent. Corn and soybeans took support from the retreating dollar and rising crude oil. Short-covering and fundamental concerns about corn and soy yields ahead of critical rains expected in the Midwest crop belt this weekend added support.
Prospects for the US corn and soy crops are still uncertain. Storms were forecast this weekend that could bring much-needed moisture to the eastern Midwest, especially for soybeans, but some traders worried the rains could fall short. "I'm very concerned about these rains that are supposed to come across Illinois over the weekend. If you've watched the last two rain systems, they have gotten to the Mississippi River and they have just died," said Roy Huckabay with the Linn Group, a Chicago brokerage. Traders also awaited input from an annual four-day crop tour of the Midwest that starts next week. The Pro Farmer Midwest Crop Tour begins scouting fields on Monday.
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