CANBERRA, Dec 8 (Reuters) - Chicago wheat futures rose on Friday for a ninth consecutive session and were on track to end the week up nearly 7%, the biggest weekly gain since June, after the largest U.S. sales to China in years caused a flurry of short-covering.
Soybeans also rose but headed for a fifth straight weekly loss, as rains in South America boosted the supply outlook. Corn was unchanged but eked out a small weekly gain.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.2% at $6.43.1/2 a bushel by 0537 GMT and up 6.8% for the week.
Prices reached $6.50 on Wednesday, the highest since Aug. 9, and have risen almost 15% since market open on Nov. 28.
The U.S. government reported private sales of more than 1 million metric tons of U.S. wheat this week, the biggest one-week total to the Asian country since July 2014.
Commodity funds who had built up a huge short position in CBOT wheat were net buyers again on Thursday, traders said, helping push up prices.
Before the rally, CBOT wheat traded near three-year lows as Russia, whose harvest is now almost complete, flooded the market with cheap grain.
The sales to China should keep U.S. wheat inventories reasonably tight, said Mecardo analyst Nick Booth, adding that Russian prices were also increasing.
"I suspect we’ll need to see some further flash sales if we expect the market to continue moving higher," he said. "A lull in demand will likely see prices ease back and the managed money crowd take the opportunity to refresh their positions."
CBOT soybeans were up 0.3% at $13.15 a bushel but down 0.8% for the week. Corn was unchanged at $4.88 a bushel but was up 0.6% from last Friday's close.
Brazil's Conab cut its forecast for the country's 2023/24 soybean output by a little over 2 million tons but still predicted a record harvest of 160.177 million tons.
It also cut its Brazil corn production forecast by around half a million tons to 118.528 million tons.
Despite the downgrades, recent rains in Brazil and Argentina, both key exporters of soybeans and corn, have helped crops after a dry and hot period that hit yields.
In the United States, another big producer, farmers are likely to plant more soybeans in 2024 and many plan to cut back on corn acreage with futures prices for that grain hovering around three-year lows.
Also supporting soybeans was U.S. Department of Agriculture confirmation of private sales of 121,000 tons of U.S. soybeans for shipment to unknown destinations in the 2023/24 marketing year.
China imported 7.92 million tons of soybeans in November, customs data showed on Thursday, up 7.8% from a year earlier but lower than traders' expectations.
(Reporting by Peter Hobson; Editing by Rashmi Aich and Mrigank Dhaniwala)
