SYDNEY: Chicago wheat futures fell on Wednesday, as traders locked in profits after steep gains of nearly 3 percent in the previous session triggered by a sharply reduced assessment of the crop in the US Plains.
While March wheat and December corn futures snapped out of three-day winning runs, January soybeans stretched gains into a fourth straight session to climb to their highest in almost three weeks on worries about supplies from South America.
"After the strong gains last night, like we often note, the market has given back some in early Asian trade," Luke Mathews, commodities strategist at the Commonwealth Bank of Australia said, referring to wheat's Tuesday gain, its biggest since September.
"The wheat fundamentals haven't changed, there is a significant concern over the US winter wheat crop."
Chicago Board of Trade March wheat, the most active contract, fell 0.14 percent to $8.87-1/4 a bushel by 0253 GMT. It closed up 2.87 percent on Tuesday, when prices hit a session high of $8.89, their loftiest since Nov. 12.
Front-month wheat fell 0.09 percent to $8.72-1/4 a bushel, after six straight days of gains.
But record low US wheat ratings following a string of weather-reduced harvests around the world underlined supply worries, helping keep a floor under prices of the grain.
Ratings for the US winter wheat crop fell to 33 percent good to excellent, an all-time low for late November, due to dry conditions in the US Plains, government data showed.
A weather-disrupted US wheat crop would further tighten the global outlook, already under pressure following a drought in the Black Sea region, analysts said.
Soybeans continue to be underpinned by concerns of smaller-than-expected South American production.
January soybeans rose 0.1 percent to $14.50-3/4 a bushel, having hit a session high of $14.56-3/4 a bushel, the highest since Nov. 9. December corn fell 0.3 percent to $7.58 a bushel.
Rains are forecast for Brazil's soybean center-west plains this week, meteorologists said, but southern growing regions are set to remain dry, leaving two of the largest producing areas drier than normal in November.
Soybean prices are too low and do not reflect the possible risk to tight global supplies if the critical South American soybean harvest in early 2013 suffers weather damage, Hamburg-based oilseeds analysts Oil World said.