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Chicago Board of Trade July wheat rose 0.61 percent to $6.19-1/4 a bushel by 1055 GMT, but the market was on track for nearly four percent weekly loss on expectations of near-record U.S. yields adding to ample global supply.
“I am looking for wheat to go down as a crop tour in the U.S. is finding record yields which will put pressure on the market,” said Lynette Tan, an analyst with Phillip Futures in Singapore.
“Corn will also come down as a strong pace of Chinese purchases will wane which will weigh on the prices.”
July corn gained 0.41 percent to $6.17 a bushel supported by Chinese buying, while July soy added 0.49 percent to $14.80-3/4 a bushel after three straight sessions of decline on long liquidation.
In Europe, Euronext May milling wheat rose 1 euro or 0.46 percent to 218.50 euros a tonne in hesitant trade while new crop November was flat at 198.75 euros a tonne after touching 2-week lows on Thursday.
Yet, rains in Europe which eased earlier drought concerns have added bearish sentiment to the market, traders said.
“There was a talk about crop problems in France because of dryness. Now, with rains, the situation is improving and this is reflected in the market,” one Italian grain broker said.
Kansas appears to be on track this year to produce its largest hard red winter wheat crop since 2003 with a record yield possible, said crop scouts on Thursday who had just completed this year’s annual tour that found fields helped by a mild winter and a wet spring.
The crop, which got off to a shaky start in some parts due to a devastating drought across the southern Plains, is expected to be 46 percent larger than last year’s, adding to overflowing global supplies.
The corn market which has been supported by Chinese buying could come under pressure as the world’s second largest consumer slows purchases.
U.S. corn export sales soared to a 21-year high last week on the active buying by China, which snapped up nearly 3 million tonnes of the grain to rebuild stocks and tamp down its near-record-high domestic prices.
Prices have since rebounded and demand from China has slowed, but the latest wave of buying was further evidence that Beijing would step into the market on price dips to bolster its grain supply, which some analysts suggest may be smaller than official estimates.
Unknown destinations, widely believed to be mostly China, bought 509,500 tonnes of old-crop corn last week and 1.92 million tonnes of new-crop corn. USDA also reported 214,000 tonnes of old-crop and 172,500 tonnes of new-crop to China.
Long liquidation which has pulled soybeans from last week’s near four-year peak could find more pressure if Chinese buyers turn to cheaper government reserves.
Some Chinese soy crushers could turn to cheaper government stockpiles as CBOT soars and supplies from South America dwindle.
Traders in the world’s largest buyer, said the government might consider selling a larger volume of soy reserves - around 3-4 million tonnes - with import prices about 20 percent above soy offered at twice-monthly state auctions.
The soy market shrugged off news that the Buenos Aires Grains Exchange had lowered its forecast of Argentina’s 2011/12 soybean harvest to 41 million tonnes, from its previous estimate of 43 million.
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