Soy firm, corn mixed ahead of USDA report; dry US weather stokes yield concern

CHICAGO: US soybean futures jumped to a 1-1/2-week high on Friday and posted their first weekly gain in a month, lifted by technical buying and short-covering amid concerns that dry US Midwest weather would limit crop production.

Corn and wheat were mixed as investors squared positions ahead of an eagerly awaited US government supply-and-demand report scheduled for release on Monday. Both markets also notched their first weekly gains in a month.

The market's main focus remained on the US Department of Agriculture's (USDA) monthly report, due for release during Monday's trading session, that is due to include highly anticipated revisions to rain-hit US corn and soybean planting.

"The market is likely to continue positioning ahead of that report and it seems loose shorts are jumping off for now," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Analysts polled ahead of the USDA report expect the agency to cut corn and soybean acreage and production, although uncertainty over the size of adjustments from prior forecasts has kept market participants on edge.

Grain markets were supported this week by dry weather in key corn and soy production areas of the US Midwest, which could dent yield prospects after excessive spring rains that delayed or prevented many farmers from planting.

"It feels like the dryness has taken the edge off of the crop conditions," said Jim Gerlach, president of A/C Trading.

More corn and soybean crops are entering their key yield-determining phases of development when dry conditions could impact yields.

The USDA will issue its next crop condition ratings on Monday afternoon.

"Today our bias is for (ratings to be) steady to maybe a few points lower," Gerlach said.

Chicago Board of Trade November soybean futures rose 8-3/4 cents to $8.91-3/4 per bushel for a 2.7% weekly gain.

September corn shed 3/4 cent to $4.10-1/4 a bushel but ended the week up 2.7%, while September wheat added 1 cent to close at $4.99-1/2 a bushel, up 1.9% in the week.

Markets are also monitoring developments in a deepening trade war between the United States and China that has already slashed US agricultural exports to the world's top commodities importer.

US President Donald Trump said on Friday that he was not ready to make a trade deal with China, fanning fears of a drawn-out and disruptive trade dispute that is now in its second year.