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Grains bounce to end week higher

02/15/2013 @ 3:47pm

U.S. grain and soybean futures finished higher Friday, fueled by technical buying and positioning before an extended holiday weekend.

The unifying theme across grain and soybean futures was profit-taking, as traders booked some profits and reduced risk on prior bets that prices would decline.

"After a very tough two weeks...grain futures were overdue to stabilize," said Rich Nelson, director of research at advisory and brokerage Allendale Inc. in McHenry, Ill.

Grain futures had fallen for most of the past two weeks, pressured by negative technical signals and improving weather conditions for crops in the U.S. and in South America.

Heading into a three-day weekend, traders were just looking to trim some risk after prices tumbled lower, Mr. Nelson said.

Monday is the U.S. Presidents Day holiday. There will be no trade Sunday night or Monday--electronic trade reopens at 8 p.m. EST Monday.

Technically based buying on views that recent declines were overdone afforded bargain hunters opportunities to buy futures at lower price levels.

U.S. soybean futures ended higher, climbing on the technically based buying and lingering worries about tight U.S. supplies. Analysts are concerned the drop in soybean prices would attract fresh demand at a time when tight U.S. stockpiles need to be rationed. South America is still weeks away from replenishing global inventories.

"The soybean gains were impressive in the face of canceled export sales," Mr. Nelson said.

The U.S. Department of Agriculture said Friday that private exporters reported the cancellations of export sales of 250,000 metric tons of soybeans to unknown destinations during the 2012-13 marketing year that began Sept. 1.

Yet solid domestic demand and firm cash market prices still show solid near-term demand, Mr. Nelson added.

Chicago Board of Trade soybeans for March delivery finished up 6 1/2 cents, or 0.5%, at $14.24 1/2 a bushel.

Corn futures finished higher on technical buying after previously declining for 10 consecutive days.

CBOT March corn ended up 4 cents, or 0.6%, to $6.98 3/4.

Wheat futures closed higher, fueled by some traders' views that the market's recent selloff was overdone. The market was vulnerable to a correction as managed funds have amassed near record bets of wheat prices declining, analysts at advisory firm AgResource Company wrote in a midday market note.

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