U.S. grain and soybean futures ended higher Friday, as worries about South America's soybean crop led the complex higher for the second day in a row.

Soybeans for January delivery at the Chicago Board of Trade closed up 18 1/4 cents, or 1.6%, at $11.30 a bushel.

The market rallied on dry weather in Argentina and Brazil, which has fueled growing concern about the soybean crop there. Traders also noted that outside markets, while not supportive, weren't weighing on prices as they did early in the week, when Europe worries flared up. A stronger dollar and weaker equities had weighed on agricultural commodities early in the week.

"The relatively quiet news front allowed grain and oilseed traders to focus a bit more on rising weather concerns in South America," Farm Futures analyst Arlan Suderman said.

Forecasts call for rains in Argentina and dry areas of southern Brazil by the middle of next week, but traders say it's unclear to what extent that would alleviate the stress from dry, hot weather.

South America is the main competition for U.S. exporters, and a smaller crop there would likely mean greater demand for U.S. soybeans.

The rally to end the week was also fueled by traders covering short positions, as the market's ability to bounce off Wednesday's close at $11, a key support level, fed ideas that the market was establishing a near-term low.

Corn futures had similar support, as the market rebounded after closing below the closely watched $5.80 level on Thursday. CBOT March corn ended up 4 cents to $5.83 a bushel. It was down 11 1/4 cents on the week.

Many traders had expected the market to fall sharply after the dip below $5.80. The market instead rebounded, which prompted some traders to cover short positions.

"Some of the bears were a little bit disappointed that you didn't get more fireworks," Jason Britt, president of Central States Commodities, said of the dip below $5.80.

Meanwhile, Britt and Suderman both said that while most of the attention in South America has been on soybeans, the weather there could also cause problems for corn and wheat supplies.

Traders are also looking at weather concerns for wheat in the U.S. Plains, where dry conditions are prompting concerns about the hard red winter wheat crop, and in the Ukraine.

Friday's gains in wheat were mostly due to short-covering and outside market support.

CBOT March wheat ended up 4 1/2 cents to $5.82 3/4 a bushel, down 2.1% on the week.

Gains in the grain and oilseed complex Friday was limited by weak export demand. The weak exports are being reflected in U.S. Gulf basis levels, which fell for corn for the second day in a row Friday. Basis levels for corn fell 1 to 4 cents. Basis is the difference between cash and futures prices.

Other Markets

U.S. rice futures ended mostly higher, posting small gains for the second day in a row as the market tries to establish a bottom after tumbling throughout the autumn. The market has been hit by poor export demand and ample world supplies.