By Paulo Trevisani

--Corn for March delivery rose 1.7% to $6.36 a bushel on the Chicago Board of Trade Friday on forecasts for dry weather in growing regions of South America.

--Soybeans for March delivery rose 1.5% to $14.70 a bushel.

--Wheat for March delivery rose 1.2% to $7.86 1/2 a bushel.

HIGHLIGHTS

Weather Premium: Weather remained a key discussion point on the supply side Friday, as dry conditions hurt yields in South America. "The weather forecasts are incrementally drier this morning, with little moisture seen over the next ten days for the southern tip of Brazil, or for most of the Argentine corn areas," ED&F Man Capital's Charlie Sernatinger said. There were also "a lot of traders talking about how the exports are starting to pick up, and how the ethanol grind has been robust, as well as animal feeding," Mr. Sernatinger added.

China Bean Buy: The USDA this morning reported a new flash sale of soybean exports to China, with 264,000 metric tons being sold for delivery in the 2022/23 marketing year. Additionally, 141,514 tons of soybeans were sold to Mexico for delivery in the 2021/22 marketing year. The new flash sales come after the USDA reported Thursday that for the week ended January 20, soybean sales totaled 1.23 million metric tons across the 2021/22 and 2022/23 marketing years, with China being the primary buyer. This was up from the week before, but fell below the forecasts of grain traders surveyed by The Wall Street Journal.

Russian Inflation: Russia is expected to continue to use quotas and taxes to keep supplies of grains in the country, boosting wheat prices, StoneX's John Payne says. That would be in reaction to rising inflation, which is pushing the Russian central bank to raise rates. On corn, Payne says that "there remains hope for a decent second corn crop from Brazil as well as a good crop for Argentina, but rains need to develop in E. Argentina."

INSIGHT

Oil Rally: As soybean futures climbed today, AgResource said a sharp increase in palm oil prices was fueling demand for soy oil. That, in turn, provided extra support for the grain at a time when South American production is being constrained by adverse weather. AgResource said that Indonesia, the world's largest palm oil exporter, "has moved to raise domestic supplies, boost domestic biodiesel production and cap exports."

Skimpy Soybeans: The outlook for South American soybeans continued to be for a smaller crop--which has pushed CBOT soybean futures up to their highest level since July, at over $14.66 per bushel. "The soybean market is telling us that it believes that the South American crop is much smaller than what is currently being published," says Arlan Suderman of StoneX. "That's seen in the futures market, which seems bent on pursuing higher chart objectives." The price has further room on the upside, Suderman adds. "Bids for summer Brazil loadings are now more expensive than US bids. That suggests that the cash market believes that China will need to come back to the United States for supplies by July."

AHEAD

-The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

-The USDA will release its monthly grain crushings report at 3 p.m. ET Tuesday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

-Corteva Inc. will release its fourth-quarter earnings before the stock market opens Thursday.

--The CFTC will release its weekly commitment of traders report at 3:30 p.m. ET Friday.

Kirk Maltais contributed to this article.

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

January 28, 2022 15:30 ET (20:30 GMT)