CHICAGO (Dow Jones)--Strong demand, technical momentum and short-covering propelled U.S. corn futures to their highest prices in more than a week on Friday.

Chicago Board of Trade July corn ended up 7 cents, or 1.9%, to $3.69 per bushel, and gained 6 cents on the week. September corn closed up 7 1/4 cents to $3.76 3/4 and December corn settled up 6 3/4 cents to $3.85 1/4.

The market was buoyed by the announcement of more export sales to China before the open. The U.S. Department of Agriculture announced private export sales of 118,000 tons of corn for delivery to China in the 2009-10 marketing year. Of that total, 58,000 tons were changed from previously being designated as a delivery to "unknown destinations."

China's emergence as a buyer of corn, while supportive in its own right, is also prompting other countries to increase their purchases rather than continuing to buy hand-to-mouth, said John Kleist, broker/analyst with Allendale.

Traders added that China's buying has attracted some attention from outside investors. Funds bought an estimated 10,000 contracts on Friday.

John Kleist, broker/analyst with Allendale, called the climb "a pressure-valve release," as anxiety about the world economy abates for the moment.

Previously bearish outside markets, including equities, were mostly neutral Friday.

"Without the weight of outside markets, we're able to trade fundamentals," a trader said.

Those fundamentals are considered supportive because of China, although even bullish traders concede that the market's upside is limited for now due to the strong start to the U.S. crop season. Weather forecasts through next week are bearish, with mostly warmer and dry weather aiding crop development.

But technically, the market performed well, traders said. Prices rallied above major moving averages, which traders said inspired more short-covering and technical buying.

In international news, Argentina has increased its forecast for soybean and corn production and says that wheat planting is likely to moderately increase this season compared to last.

The forecast for total corn production was raised 500,000 tons to 21 million tons. So far 68% of the crop has been harvested.

CBOT oats futures ended higher. July oats closed up 2 cents, or 1%, to $1.96 per bushel, while September oats settled up 2 cents to $2.03 3/4. The July contract gained 1/4 cent on the week.

Ethanol futures were higher. June ethanol closed up $0.012 to $1.592 per gallon and July ethanol settled up $0.016 to $1.603.


- By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com