Winnipeg/Reuters – U.S. soybean futures jumped nearly 2 per cent on Friday as investors covered short positions due to strong export demand, registering their biggest weekly gain since mid-December.

Chicago wheat edged higher, and registered a big weekly gain on concerns over dry weather in parts of the U.S. Plains.

Corn also climbed, on strong export sales.

The most-active May soybean contract touched its highest price since Feb. 23 on strong demand from top importer China. The contract gained 14-3/4 cents, or 1.7 per cent, at $8.78-1/2 per bushel.

For the week, soybeans also posted a 1.7 per cent gain.

Investors covered soybean short positions with an eye on Wednesday’s monthly report from the U.S. Department of Agriculture on world crop supply and demand, said U.S. Commodities analyst Jason Roose.

“Everything leads to the shorts lightening up and a firmer tone.”

Traders have already factored in expected large leftover U.S. soybean supplies from the current crop year and a big South American harvest, but strong demand could change the picture, Roose said.

China is expected to buy 83 million tonnes of soybeans in 2015/16, up from 78.35 million tonnes in the previous year, COFCO Futures Managing Director Wang Lin said on Wednesday.

Recent weakness in the U.S. dollar, which dipped on Friday, has also supported U.S. crops, making them more competitive globally.

The most-active Chicago wheat futures contract gained 1 cent to $4.60-3/4 per bushel after hitting $4.64-1/2 earlier in the session, the highest price since Feb. 23. It rose 1.9 per cent this week, its biggest gain in three months.

“The U.S. Southern Plains are too dry for these unseasonably warm temperatures,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“And weather forecasters do not expect much relief in the next week.”

The weekly U.S. Drought Monitor, released on Thursday, showed that 21 per cent of Oklahoma, the No. 3 winter wheat state last year, was “abnormally dry,” up from 1 per cent a week ago.

Still, wheat also faces global export competition and needs to be attractively priced for buyers, Roose said.

Corn tacked on 1-3/4 cents, or 0.6 per cent, at $3.58-1/4 per bushel.

The market was supported by the USDA’s report showing weekly export sales of U.S. old-crop corn at nearly 1.1 million tonnes, the most in a month.

But corn lost ground for a second straight week, easing 0.3 per cent, amid plentiful supplies.

(Additional reporting by Naveen Thukral in Singapore, Sybille de La Hamaide in Paris and Julie Ingwersen in Chicago)