Soybeans set for biggest weekly gain since December

U.S. soybeans rose on Friday to head for their biggest weekly gain in more than four months, supported by the threat of rain damage to the Argentine harvest, a wave of fund buying and healthy U.S. export demand.

Corn edged lower but was still set for a second consecutive weekly rise after being carried along by the rally in soybeans and increasing dryness in Brazilian corn areas.

Wheat, however, was poised for a second weekly fall as the prospect of more rain relief in dry parts of the U.S. Plains maintained a bearish mood about ample global supplies.

The most active Chicago Board of Trade soybean contract was 0.3 percent higher at $9.50-1/2 a bushel by 1158 GMT, putting it up by 3.7 percent over the week, the biggest weekly run-up since early December.

Corn was down 0.3 percent at $3.72-3/4 a bushel but up 2.9 percent over the week. Wheat slipped 0.6 percent to $4.57 a bushel, leaving it down 0.7 percent this week.

"Weather forecasters say Argentina will continue to see rain until the middle of next week," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. "Market chatter is focused on a potential reduction to Argentina's 60 million-tonne crop forecast."

Heavy downpours have ruined the harvest for nearly 5 percent of Argentina's soybean farms and could damage more of the 2015-16 crop if rains continue into next week as expected.

Widespread weekend rain in Argentina could hamper harvesting and heavy showers in the northeast quarter of the soybean belt could lead to localized flooding, the Commodity Weather Group said in a daily note.

Weather concerns have also lent support to corn prices due to dry conditions affecting part of the Brazil's growing belt.

Traders say this week's gains in soybeans and corn have also been fueled by hedge funds and other investors plowing money into the sector, despite the current oversupply of crops.

For wheat rains over the weekend are likely to provide relief to the hard red winter crop in the U.S. Plains, further reducing yield risks and helping keep the global wheat market on course for another year of large production.

In France, the European Union's biggest wheat producer, 92 percent of soft wheat was rated good or excellent in the week ending April 11, farm agency FranceAgriMer said on Friday.