US corn and soyabeans edged higher on Friday, expanding gains from the previous session as investors covered short positions and domestic end users hiked bids in efforts to entice sales by farmers. Futures for each commodity traded in both positive and negative territory at the Chicago Board of Trade amid steep gains in the dollar that could curb export demand for US supplies. Wheat futures were mostly higher while soyameal was narrowly lower.
CBOT December corn, which had its largest gains of the month on Thursday, was up 3-1/2 cents to $3.76-3/4 per bushel, bolstered by strong cash bids, especially from ethanol makers. "This is one of those years that you have abundant (corn) supplies on paper but the cash market is going to reflect a short supply because it's in the farmers' hands. If they are not willing to sell, the cash markets are going to be short," said Jefferies Bache analyst Shawn McCambridge.
Ethanol futures were up 4.2 percent, extending gains after the US Environmental Protection Agency said it will not finalise biofuel targets for 2014 until next year. McCambridge and other analysts said the EPA announcement had little effect on the corn market. "We are on a projected path to produce just shy of 14 billion gallons (of ethanol), with what we've produced already and expectations of a decent production through the end of the year."
Soyabeans for January delivery were up 4-3/4 cents at $10.25-1/4 as of 11:20 am CST (1620 GMT) while CBOT December wheat climbed 3-1/4 cents to $5.50-1/2. "It's hard to be particularly bullish about corn and soyabeans when you are looking at record US production," said Sebastien Techer of French consultancy Agritel. "Export demand may help prevent prices from collapsing but the US supply balance is very heavy," he said. A rise in the dollar index was tied to a sharp drop in the euro as investors reacted to comments by European Central Bank chief Mario Draghi on declining inflation expectations, which also curbed Chicago crop futures.
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