CHICAGO, Aug. 29 (Xinhua) -- CBOT agricultural futures trended higher in the past week as the U.S. dollar continued its decline with the lowest weekly settlement since May 2018, said Chicago-based consulting company AgResource.

Corn futures ended sharply higher as needed rainfall failed to materialize across Iowa and Illinois. Weather forecast for the next week also trended abruptly drier with little rain indicated. U.S. corn yield estimates are being trimmed, AgResource noted, but the impact of August dryness on corn yield won't be nearly as severe as on soybeans.

Nevertheless, the combination of reduced yield potential and Chinese demand has triggered massive short covering over the last two weeks. The Chicago company projects 2020 U.S. corn end stocks in a range of 2.5-2.9 billion bushels depending on yield.

On the other hand, the market doubts the U.S. corn yield will fall below 176-178 bushels per acre. Incredible profitable margins will sustain South America acreage expansion indefinitely; and ethanol's demand draw will be slow to recover as gasoline use seasonally slows.

U.S. wheat futures ended the week higher on confirmation that China secured two cargoes through the week ending Aug. 20. Slow producer selling has kept FOB prices of wheat in Western Europe elevated and well above the values of last year in August. Black Sea cash prices also jumped by 5 dollars per metric ton. Russian wheat has been by far the world's cheapest since mid-summer, and export demand is finally being found.

However, as production hikes are expected in Russia, Canada and Australia, the combination of these adjustments will add 5-6 million metric tons to major exporter production. World wheat trade through August is down 13 percent from last year. AgResource thinks it is a concern.

Soybean futures rallied to strong gains with spot futures marking the highest weekly close since June 2018. Heat and limited rainfall have taken a toll on crops in Iowa and Illinois, and the hope for relief rains has been wiped out in the late week weather model forecasts. AgResource expects national soybean crop condition ratings to slide another 2-3 percent in Monday's crop report.

China continues to buy U.S. soybeans. U.S. exports are starting a seasonal advance, which will continue into November when U.S. exports peak typically. Though U.S. soybean crop ratings are in decline, the 2020 crop is far from a disaster, AgResource holds.

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