U.S. wheat rose for the third straight session on Friday on fears of tightening global supplies and expectations of a curb on exports from the Black Sea region.
Soybeans advanced on strong cash markets and talk of continued export demand. Corn was nearly unchanged, underpinned by tight supplies following this summer's historic U.S. drought.
At the Chicago Board of Trade (CBOT), September wheat settled up 12-3/4 cents, or 1.5 percent, at $8.74-1/2 per bushel (all figures US$).
Benchmark November soybeans ended up 20-1/2 cents, or 1.3 per cent, at $16.45-3/4 a bushel, while December corn finished down 1/4 cent at $8.07-1/4 a bushel.
Trade was thin in all three markets. Estimated daily volume in CBOT wheat futures, near 76,000 contracts, was on track to hit a three-month low if verified in official data. Daily volume in soybean futures looked set to fall below 100,000 contracts for the first time in nine months.
Wheat rose on concerns about tightening global supplies, with droughts in Russia and Australia in the spotlight.
"People are saying the Russian spring wheat crop is getting smaller by the day. That has fueled some buying in wheat and could be bullish in the long run," said Brian Basting of Advance Trading in Bloomington, Ill.
"There is growing concern about dryness in Western Australia, the largest wheat-producing state in Australia. They need rain and have not gotten a lot. The market was depending on that (crop), particularly with the smaller crop we will see in the former Soviet Union," Basting said.
Russian Agriculture Minister Nikolai Fyodorov on Friday ruled out a grain export ban but did not exclude "pinpoint interventions" to influence exports.
"All instruments are on the table, except for an embargo, (which) could do more harm than good," Fyodorov told Reuters.
Export demand has also been revived, with wheat prices falling nearly six per cent from last Friday's highs.
South Korean buyers bought U.S. wheat overnight, and there was also talk that Taiwan had purchased at a scheduled tender.
Algeria, a major importer, bought at least 350,000 tonnes of optional-origin milling wheat this week, taking advantage of the pullback in prices.
Cash markets lift soybeans
Soybean futures climbed as cash markets firmed amid slow farmer selling and expectations of continued demand from exporters as well as domestic soy processors, despite near-record high prices. Soybean crushing margins have been high, creating an incentive for processors to buy soybeans.
"We had a strong (monthly U.S.) crush report and another strong week of export sales yesterday. We are still making sales, even at these high levels," Basting said.
Nonetheless, November soybeans ended the week nearly unchanged, with a net gain of two cents, as beneficial rains in the U.S. Midwest this week kept a lid on the market. The moisture was expected to halt crop deterioration due to drought and possibly boost yields in some areas.
Showers brought one to 1.5 inches of rain to the central Midwest on Thursday, and up to 2.5 inches in west-central Indiana. Forecasts called for dry conditions to return, although temperatures should be seasonal. The rains may also push back the soybean harvest.
"The crusher is looking for beans because the harvest is not going to start as soon as they thought," said Mark Schultz, with Northstar Commodity in Minneapolis.
"Everybody thought it was so hot that we would be doing beans by Labour Day. Well, there is a lot of regrowth coming on the beans with the moisture that has gone through. They are still grass-green in Minnesota," Schultz said.
Soybean plants turn from green to brown and drop their leaves as they approach maturity.
Corn futures flat
Corn futures ended flat after spending the week in a tight trading range as the market awaited more information about harvested yields. An annual four-day U.S. crop tour organized by agricultural advisory firm Pro Farmer was scheduled to begin scouting fields on Monday.
Demand for cash corn from domestic ethanol plants has helped support basis bids and lifted the spot September corn futures contract against new-crop December, Schultz said.
-- Julie Ingwersen
covers commodity markets for Reuters in Chicago. Additional reporting for Reuters by Nigel Hunt in London, Naveen Thukral in Singapore and Sarah McFarlane in London.