U.S. soybean futures were mostly stronger Wednesday on signs of strong export demand and concerns that rain in the forecast for the U.S. Midwest will arrive too late to provide much benefit for the crop, traders said.
Chicago Board of Trade wheat futures slipped on profit-taking despite rising global interest for the feed grain, while corn was mixed, with old-crop futures contracts supported by tight cash markets and new-crop weighed down by profit-taking.
Soybeans led the gains, turning higher after the U.S. Agriculture Department said Chinese buyers booked deals to import 120,000 tonnes of U.S. soybeans.
Most new-crop months were supported by concerns that the crop in states west of the Mississippi River would suffer, with yield at risk due to dry conditions during the next week.
"Beans are rallying on talk that the month of August in the heart of the bean belt is going to go down as the driest on record," Charlie Sernatinger, analyst at EDF Man Capital, said in a note to clients.
Chicago Board of Trade September soybean futures settled up 19 cents at $14.33 a bushel, closing at its session high. New-crop November soybeans gained 2-1/4 cents to $13.72-3/4 a bushel (all figures US$).
"Uncertainty about the weather is doing what it usually does on grain markets: raising prices," a European trader said.
The hot and dry conditions caused crop forecaster Lanworth on Wednesday to cut its outlook for U.S. soybean production by two per cent, to 3.140 billion bushels, based on expectations for an average yield of 40.8 bushels per acre.
CBOT September wheat futures were down 4-1/4 cents at $6.46-1/2 a bushel, but MGEX spring wheat rose and KCBT hard red winter wheat contracts dipped only slightly.
Importers typically seek high-protein wheat, represented by the KCBT and MGEX contracts, in their deals.
USDA also announced on Wednesday morning that exporters reported the sale of 119,000 tonnes of U.S. wheat to unknown destinations.
Egypt said on Wednesday that it had signed deals to buy 295,000 tonnes of wheat from Romania, Russia and Ukraine for shipment in October.
Egypt had not been expected to buy any U.S. wheat, but the tender showed that demand from the world's top buyer remained strong and provided a base of support for wheat prices.
CBOT September corn settled up 4-1/2 cents at $5.04-1/4 a bushel while new-crop December dropped 5-1/2 cents to $4.80-3/4 a bushel.
Farmer sales of corn to ethanol makers and processors have been slow despite price hikes in recent weeks, keeping most cash market bids firm and lending strength to front-month futures.
But harvest expectations continue to weigh on new-crop months. Chad Henderson, grain market adviser at Prime Agricultural Consultants in Brookfield, Wisconsin, said corn was mature enough to handle the heat and dryness during the next few weeks without suffering further hits to yield.
-- Mark Weinraub is a Reuters correspondent reporting on grain futures from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.