Chicago Board of Trade wheat futures reached a two-month high on Friday, buoyed by short-covering and expectations of strong demand from China and Brazil.
Soybeans firmed on bargain-buying and positioning ahead of a key U.S. government stocks report due Monday, while corn fell as the harvest of a likely record-large U.S. crop progressed.
At the CBOT, December wheat settled up 4-3/4 cents at $6.83 per bushel after rising to $6.85-1/2, the contract's highest level since July 17, and breaking through the 100-day moving average at $6.81 (all figures US$).
November soybeans ended up three cents at $13.19-3/4 a bushel and December corn fell 2-3/4 cents to $4.54 a bushel.
CBOT wheat posted a weekly gain of 5.7 per cent, its biggest advance in more than 14 months.
"Technically you have changed the story in the wheat market," said Terry Linn, analyst at the Linn Group, a Chicago brokerage.
Commodity funds hold a large net short position in wheat, leaving the market vulnerable to bouts of short-covering.
Recent export demand has played a role. Hefty purchases by Brazil and China have driven U.S. exports, which are well over half USDA's target of 29.9 million tonnes just four months into the 2013-14 marketing year.
"U.S. wheat is firm because of increasing overseas demand from countries like Brazil and China as unfavourable weather has hit their domestic crops," said Joyce Liu, an investment analyst at Phillip Futures Singapore.
Underscoring Brazilian import needs, millers are looking at Polish wheat as a cheaper alternative to North American supply, milling group Pacifico said Thursday.
On Friday, USDA said private exporters reported sales of 121,600 tonnes of U.S. wheat to unknown destinations.
"When you are taking a very short market and throwing some things at it, you can run these shorts further than you'd think," Linn said.
"You had a touch of weather with the Argentine frost. You had the uptick in demand in the export market, and feeding demand has been good -- and that is going to be reflected in Monday's report," Linn said, referring to the U.S. Department of Agriculture's quarterly stocks report.
Analysts expect that USDA's wheat stocks figure on Monday will point to strong domestic use of wheat in livestock feed rations, given scarce supplies of U.S. corn over the summer months.
Soy market positions for USDA report
Nearby soybean contracts firmed on light technical buying and positioning ahead of the USDA's stocks report, which is expected to show Sept. 1 U.S. soybean inventories at a nine-year low.
The CBOT November futures contract rose 0.3 per cent for the week, stabilizing after a 4.8 per cent plunge the previous week. November soybeans traded at $14 a bushel as recently as Sept. 13, but then tumbled nearly $1 as late-season rains appeared likely to improve yield prospects.
However, lingering uncertainty about prospects and how many acres were planted last spring underpinned values.
"We are correcting oversold conditions," Linn said.
Corn futures sagged. Commodity funds hold a net short position in corn, but fund short-covering at week's end was offset by seasonal pressure as U.S. farmers continued to harvest a crop that the USDA has estimated at a record-large 13.8 billion bushels.
The crop was seven per cent harvested as of Sept. 22, and forecasts called for only minor rain delays in the Corn Belt over the next two weeks.
"All in all I don't see any major issues, there will be a little bump this weekend but nothing major... nothing to cause a big slowdown," said John Dee, meteorologist at Global Weather Monitoring.
Due in part to spillover support from wheat, CBOT December corn posted a weekly rise of 0.7 per cent, halting a three-week decline.
-- Julie Ingwersen is a Reuters correspondent covering agriculture and futures markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.