CHICAGO, Aug. 28 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural futures closed higher in the past week as the world's agricultural demand is shifting to the United States, Chicago-based AgResource noted.

Weaker U.S. dollar will pull fresh funds into the U.S. agricultural futures markets into yearend, as a sliding U.S. dollar would boost purchasing capacity of other nations.

CBOT corn futures ended the week higher and marching seasonal recovery process is beginning. AgResource can't rule out a secondary test of 5.30 to 5.35 dollars for the December contract, but downside risk is becoming increasingly limited.

Most importantly, U.S. export demand is beginning to respond to U.S. corn's increasingly competitive position in the world marketplace. The shift in demand to the U.S. market has been slow, but importers have little choice but to boost forward feed coverage with U.S. corn between now and the first quarter of 2022. The rapid development of La Nina is also a concern via its strong correlation with drought in Argentina and Southern Brazil.

Record low U.S. and exporter corn stocks/use are projected in 2021-2022. Additional U.S. supply loss will raise upside potential to 6.5 to 7 dollars. Corn is a multiyear bull market with demand to be the upside leader into 2022.

U.S. wheat futures recovered. Statistics Canada on Monday is expected to peg Canadian production at 21 to 22 million metric tons, which amid already tight stocks strips another 2 million metric tons from Canada's exportable surplus.

Wheat's balance sheet issues are considerable, and these issues can't be solved until next summer's Northern Hemisphere harvest.

CBOT wheat's upside trend is clear. Importers continue to use modest weakness to add to forward supply coverage. AgResource notes that most large importers are only covered through mid-autumn and additional demand is anticipated on world wheat weakness.

The United States is expected to boost its share of world trade beginning in late year as importers have no choice but to leave traditional EU and Russian markets. Bullish vigor resumes once Northern Hemisphere corn crop sizes are defined and feed markets start playing catch up to the recent world wheat rally.

Soybean futures recovered early week losses and closed higher in the week. CBOT soybean lows have been set on bearish news related to U.S. Environmental Protection Agency (EPA) soyoil mandates.

AgResource doubts that the EPA lowering of biofuel mandates in 2020 or 2021 will have much if any impact on U.S. ethanol or biodiesel production. Trader interest is gradually shifting away from yield toward upcoming demand. New crop sales have been delayed as end-users balk at high prices. However, the window for a seasonal CBOT decline is diminishing, with seasonal trends higher after Sept. 1. End-user demand will improve into November.

U.S. Department of Agriculture (USDA) made sales announcements to China and unknown destinations through the week that amounted to just over 19 million bushels. Chinese crush demand looks to average 73 to 75 million bushels a week in the year ahead, while U.S. sales to China are below a year ago. U.S. daily soybean sales to China should occur on a regular basis with support under 13 dollars for November contract. A sub-49 bushels per acre (BPA) U.S. soybean yield needs to be confirmed to support a rally over 14.5 dollars.