CHICAGO (Dow Jones)--Corn futures climbed Thursday, rallying to session highs on the close, propelled by a late-session plunge in the U.S. dollar and supportive demand news.

Nearby Chicago Board of Trade July corn settled at $3.62, up 2 3/4 cents, or 0.77%, and December corn ended 1/2 cent, or 0.13%, higher at $3.78 1/2.

The stabilization of the euro in afternoon dealings took the edge off the U.S. dollar and subsequently allowed crude oil and equities to trim early losses. Grain futures followed suit, with nearby corn futures garnering additional support from underlying export demand.

Solid demand for U.S. corn and prospects for more buying interest from China was a supportive factor for the market, said Brian Hoops, president of Midwest Market Solutions in Yankton, S.D.

U.S. Department of Agriculture Secretary Tom Vilsack said in an interview Thursday he sees "great potential" in China as an importer of U.S. corn, based on that country's recent purchases. China, according to USDA data, has recently purchased 354,100 metric tons of corn from the U.S. for delivery in the 2009-10 marketing year and 130,000 tons for delivery in the 2010-11 marketing year, which will begin Sept. 1.

China is an untraditional buyer that has been booking some U.S. corn to cool domestic prices.

Firm cash market prices served as a reflection of good underlying demand, which helped buoy nearby contracts on bull spreads, Hoops added.

New-crop/deferred-month futures were under pressure for most of the day from beneficial crop weather forecast for the Midwest corn belt. A warmer, drier weather pattern for the Midwest next week is seen promoting good yields and record crop potential, Hoops said.

The mixed tone was consistent until a late-relief rally in outside markets took some pressure off prices. Traders who bet on continued price weakness rushed to cover their positions, producing a late upward push on the close.

The DTN/Meteorlogix weather forecast calls for a period of drier and much warmer to hotter weather beginning this weekend and continuing for much of next week. This should favor spring planting and early development of corn and soybeans, Meteorlogix said.

Speculative funds were estimated buyers of 5,000 lots in corn. Fund activity is a measure of investment money flow in the market.

CBOT oats ended lower. July oats settled down 1 1/4 cents, or 0.64%, to $1.94.

Ethanol futures were lower, keeping pace with weakness in the energy sector. June ethanol closed $0.025, or 1.56%, lower at $1.58 and July ethanol settled down $0.022, or 1.37%, to $1.587 a gallon.

-By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604;