CHICAGO, Feb 17 (Reuters) -
Chicago Board of Trade corn, soybean and wheat futures inched higher on Friday as traders covered short positions ahead of a
three-day
U.S. weekend and weighed contrasting crop prospects in South America, analysts said.
Uncertainty about the future of a Black Sea grain export corridor underpinned values, while a firming dollar and declines in crude oil prices capped rallies.
As of 1:07 p.m. CST (1907 GMT), CBOT March soybeans were up 2 cents at $15.28-1/2 per bushel and March corn was up 1-1/4 cents at $6.77-1/4 a bushel. CBOT March wheat was up 1-1/4 cent at $7.66-1/4 a bushel.
Corn and soybean futures have chopped around this week as traders shifted their focus from
problems
with drought-hit crops in Argentina to
expectations
of a record-large Brazilian soybean harvest.
"It creates a conversation: Is the Brazilian bean crop big enough to offset the losses in Argentina?" said Tom Fritz, a partner with EFG Group in Chicago.
The dollar index hit a six-week top, making U.S. grains less attractive globally, as investors upped their expectations for U.S. interest rates after latest economic data.
Similarly, crude oil futures sagged and were on track for a weekly decline on worries that interest rate hikes could weigh on demand. Corn and soybeans sometimes follow trends in crude oil futures given their respective roles as feedstocks for ethanol and biodiesel fuel.
Meanwhile, an escalation in fighting in eastern Ukraine and renewed Russian criticism of a wartime shipping corridor from Ukraine underpinned the wheat market. Negotiations will start in a week on extending the corridor agreement, a senior Ukrainian official said on Friday.
"You've got Black Sea anxiety. The anniversary of the Russian invasion is next Friday," Fritz noted, adding that K.C. hard red winter wheat futures drew additional support from dry conditions in portions of the U.S. Plains winter wheat belt.
"If anybody wants to be long wheat, they want to be long K.C.," Fritz said.
Traders await the U.S. Department of Agriculture's annual Outlook Forum next week expected to feature the agency's preliminary forecasts for 2023 plantings and production of major U.S. crops. (Reporting by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Rashmi Aich, Chizu Nomiyama and Leslie Adler)
