Wheat up for third day on U.S. weather concerns

Chicago wheat rose for a third straight session on Friday, with the market set for its biggest weekly gain since early December on concerns over dry weather in parts of the U.S. Plains.

Soybeans rose to a one-week high on support from strong demand from top importer China, while corn edged higher although the market is on track for a second week of declines amid plentiful supplies.

The most-active wheat futures contract on the Chicago Board of Trade was 0.65 percent higher by 1235 GMT at $462-1/2 after hitting a nearly two-week high of $464 earlier in the session. It is up 2.3 percent this week, on course to post its biggest gain since the week ending Dec. 4.

Soybean futures were up 0.8 percent at $8.71 after hitting a more than one week high of $8.71-3/4 earlier, while corn was up 0.2 percent.

"The U.S. Southern Plains are too dry for these unseasonably warm temperatures," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia. "And weather forecasters do not expect much relief in the next week or so."

The weekly U.S. Drought Monitor, released on Thursday by a consortium of climatologists, showed that 21 percent of Oklahoma, the No. 3 winter wheat state last year, was "abnormally dry," up from 1 percent a week ago.

Forecasts called for only limited rains in the next two weeks.

A storm next week is expected to miss the driest areas of the Plains and instead soak soft red winter wheat areas of the southern Midwest and the Delta, causing localized flooding.

In more bullish news for the wheat market, Ukraine's 2016/17 harvest is expected to drop by about 20 percent from a year ago to 19-20 million tonnes as dry weather at the time of planting takes a toll on yields, an agricultural broker said on Thursday.

Operators were also monitoring new developments in Egypt, the world's largest importer of wheat, where confusion is still high after the country rejected wheat cargoes due to ergot fungus and is envisaging changes to its import policy, traders said.

Soybeans are being underpinned by expectations of strong demand from China.

China's soybean imports are forecast to climb 6 percent in the year to September 2016 on higher demand for animal feed, a senior industry official said earlier this week.

The country is expected to buy 83 million tonnes of soybeans in 2015/16, up from 78.35 million tonnes a year ago, Wang Lin, managing director of COFCO Futures said on Wednesday.

The corn market is supported by the U.S. Department of Agriculture reporting weekly export sales of U.S. old-crop corn at nearly 1.1 million tonnes, the most in a month.