U.S. soybean prices climbed 1.6 per cent on Friday in a rebound from sharp losses the previous session, but still notched their first weekly drop in one month.
Corn and wheat rose more modestly after hitting nearly six-month lows on Thursday.
The market is "very, very oversold, you're down pretty hard for the week, so you've got some bargain hunters coming in," said Jerrod Kitt, director of market information at The Linn Group in Chicago. "The break is starting to stimulate some foreign demand."
Grains advanced despite declines in other financial markets, with equities and crude oil sliding the day after talks to avert a U.S. fiscal crisis were dealt a setback.
"It's impressive that we're so resilient in the face of weakness in the macro markets," said Arlan Suderman, senior market analyst at Water Street Advisory in Illinois.
Nearby corn and soybeans failed to test key support levels during their steep drops this week, triggering a technical bounce, in addition to bargain-hunting, Suderman said.
Funds may have wrapped up much of their year-end liquidation of positions, and corn and soybeans typically pick up strength around the holidays, said Terry Reilly, senior commodity analyst at Futures International.
"There's little left of the sellers so the buyers come back in and they can afford it," he said.
Chicago Board of Trade (CBOT) January soybeans rose 22 cents or 1.6 per cent to $14.30-3/4 a bushel after sliding more than two per cent on Thursday (all figures US$). Soybeans lost 4.4 per cent for the week.
Soybeans came under sustained pressure this week because of signs of softer demand from China, the world's largest consumer of the oilseed.
There were no fresh cancellations of Chinese purchases on Friday, although the U.S. Department of Agriculture said that a 110,000-tonne soybean sale reported as export business to unknown destinations on Tuesday, was actually a domestic deal.
On Thursday, private exporters reported the cancellation of 540,000 tonnes of U.S. soybeans sold to China -- the biggest cancellation by the world's top importer of the oilseed in at least 14 years.
Traders said the cancellations were due to a likely bumper crop in Brazil, the world's second-largest soybean exporter, where China could book supplies at much lower prices.
Heavy rains have fallen over Brazil's southern grain producing states this week, meteorologist Somar said on Friday, as some analysts raised their views for what is expected to be a record soybean crop.
Brazil's government food supply agency Conab forecast the soybean crop at a record 82.6 million tonnes.
March corn rose 5-1/2 cents or 0.8 per cent to $7.02 a bushel, with short-covering and bargain-buying noted. The contract shed 3.9 per cent for the week, which was its third straight weekly loss.
Corn drew some support from continued concerns over South American production.
Corn slumped this week under pressure from weaker demand, while a forecast for the biggest U.S. corn acreage since 1936 from closely watched private analytics firm Informa Economics also dragged on prices.
March wheat edged up 1-1/2 cents or 0.2 per cent at $7.92 a bushel, overcoming brief losses. Wheat gave up 2.7 per cent for the week, the third consecutive week of losses.
Wheat is underpinned by drought threatening the U.S. winter wheat crop. The first major snow storm of winter did little to ease the drought, which is the worst in more than 50 years in the crop-growing U.S. Central Plains and Midwest.
Argentina's agriculture ministry on Thursday cut its estimate for 2012-13 wheat production by five per cent to 10.5 million tonnes, which is still higher than leading private forecasts but reflects damage caused by wet weather.
-- Rod Nickel writes for Reuters from Winnipeg. Additional reporting for Reuters by Ivana Sekularac in Amsterdam and Colin Packham in Sydney.