Chicago agricultural commodities close mixed over the week

CHICAGO, Dec. 3 (Xinhua)-- Chicago Board of Trade (CBOT) grains futures settled mixed over the trading week which ended Dec. 1, with corn futures rising higher while wheat futures trading lower.

CBOT corn rallied 3 cents on late week fund short covering, which is being driven by less than ideal climate forecasts for South America. As expected, the arrival of La Nina is working to keep rainfall away from Argentina and Southern Brazil, and in the case of Argentina some 30 percent of the crop there will begin pollinating in the last half of December.

The U.S. Gulf corn is competitive with South American origin and the U.S. export sales pace will increase. None of this will really change the U.S. balance sheet, but with funds sitting on a sizeable short, corn could rally 0.25 to 0.4 dollar per bushel on their liquidation.

Winter wheat futures ended lower, but other contracts crawled to minor gains. There's not a lot of fresh news available, but a managed fund net short position this week worth 123,000 contracts is bullish and Southern Hemisphere production has shown limited signs of improvement.

Argentina yield data indicates the U.S. Department of Agriculture's forecast is overstated. Too much rain will fall across South Australia into mid-December. And drought will continue to expand across the U.S. hard red wheat belt.

However, a needed demand driver remains absent and the pace of U.S. export sales has been disappointing. There's hope for better interest in the first quarter of 2018, but this looks to be short lived barring adverse weather in the Black Sea.

Soybeans traded on both sides of unchanged through the week, with much of the action in the CBOT soy markets realized in soy complex spreads ahead of the U.S. Environmental Protection Agency(EPA) biofuel announcements, and building concerns for South American weather.

The EPA' s biofuel targets did not offer any surprises, and was little changed from the initial proposals that were released back in July.

Rallies have been slowed by rising South American and U.S. soybean crush and meal production rates, while breaks under 300 dollars per tonne have repeatedly found long term end user support.

Argentina has planted 43 percent of its soybean crop versus the 5-year average of 53 percent and the market is quickly building interest in weather. In a La Nina year, the odds are high that dryness with building heat will be the theme for the CBOT through December. Enditem