By Jacob Bunge

 

CHICAGO--U.S. grain and oilseed futures were slightly higher priced on Friday, supported by persistent doubts over the size of impending harvests.

Price gains among corn, wheat and soybean contracts helped reverse some of the heavy losses the markets sustained on Thursday following another rosy report on crop yields. Still, corn futures remained near Thursday's closing price, which was the lowest in nearly a year.

Bargain-hunting buyers helped drive some of Friday's gains, analysts said, as continued concern over the health of crops in portions of the U.S. Farm Belt pushes back against forecasts from the U.S. Department of Agriculture and private estimates that foresee another bumper harvest.

"It's a standoff," said Kurt Koester, president of Iowa-based grain brokerage AgriSource Inc., who said he has doubts about the corn crop in places like Indiana that sustained heavy rain early in the growing season.

Grain futures were "good old-fashioned oversold" heading into Friday's trading session, Mr. Koester said, after a report from Informa Economics pegged U.S. corn yields and production higher than some observers thought reasonable.

December-dated corn futures, the most heavily traded contract at the Chicago Board of Trade, were up 3/4 cent, or 0.2%, at $3.62 1/4 cent in midmorning trading on Friday. September corn contracts, which expire on Sept. 15, were unchanged at $3.47 3/4 a bushel.

Earlier price gains were tempered by Friday's report on U.S. employment that helped lift the U.S. dollar against other currencies. A rising dollar can pressure grain prices, raising the potential for U.S. crops to become less competitive in international markets.

The strengthening dollar, along with the upbeat crop forecast, helped drive wheat futures to close at their lowest level in more than five years on Thursday in Chicago trading. But December-dated wheat contracts rebounded on Friday, recently trading 1 1/4 cent higher at $4.66 1/2 a bushel. The front-month September contract was 3/4 cent, or 0.2%, higher at $4.57 1/4.

Trading was light ahead of the Labor Day holiday weekend in the U.S.

The string of upbeat estimates on U.S. crop production has affixed traders' attention on the USDA's September supply and demand report due out on Sept. 11. The September crop report tends to carry greater weight among traders given the nearness of harvest for some big U.S. crops like corn. "It's easy to argue with an August [USDA] yield estimate but much harder to argue with a September yield estimate," said Dustin Johnson, risk manager and strategist at EHedger, based in Clarendon Hills, Ill.

Soybean futures edged lower on Friday, pressured by continued concern over the Chinese economy and the potential for a slowdown there to sap demand for U.S. oilseeds, particularly among China's growing meat industry, a major consumer of soybean meal for animal feed.

"The key issue for bean and meal demand will be how the Chinese economy affects their upward spiral of protein demand, mainly pork and poultry," wrote analysts with INTL FCStone in a research note Friday. "A slowdown in the rate of increase is almost a given."

November-dated soybean futures, the heaviest traded, were 2 1/2 cents, or 0.3%, lower at $8.67 a bushel. September-dated contracts were 1 1/2 cents lower at $8.78 1/4 a bushel.

Write to Jacob Bunge at jacob.bunge@wsj.com

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(END) Dow Jones Newswires

September 04, 2015 11:39 ET (15:39 GMT)

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