LONDON: Chicago wheat futures turned lower on Thursday, retreating from a six-month peak as a short-covering rally ran out of steam, while soybean and corn prices edged higher ahead of a US Department of Agriculture report due later in the day.
Dealers said the recent run-up in wheat prices had also been driven by US crop concerns, though overall global supplies remained ample.
The most activce Chicago Board of Trade wheat contract was 0.8 percent down at $4.57 a bushel at 1200 GMT, having earlier marked its highest since Aug. 8 at $4.64-1/2.
"There are issues with the US wheat crop, but we think these (recent) gains are more to do with shorts covering positions," said one Singapore-based trader.
"As far as global supplies are concerned, there is no real threat as of now."
Dry conditions are threatening yield prospects in US Southern Plains states such as Kansas and Oklahoma, where rain has been scarce since October.
World wheat supplies, however, are abundant after bumper crops in several major producers, including Russia and India.
March milling wheat futures in Paris fell 0.3 percent to 159.75 euros a tonne.
France exported 792,000 tonnes of soft wheat outside the European Union in December, the largest monthly volume so far in the 2017/18 marketing year, customs data showed on Wednesday.
Analysts at Agritel, however, said that it would still be extremely tough to meet export targets in the face of stiff competition from Argentina in North African markets.
US soybeans gained 0.3 percent to $9.86-1/2 a bushel while corn was up 0.1 percent at $3.65-1/2 a bushel.
The USDA will issue its latest world supply and demand reports at 1700 GMT. Analysts surveyed by Reuters on average expect the USDA to raise its forecast of US 2017/18 soybean ending stocks, reflecting a sluggish export pace.
"US soybean exports proved weaker than had been hoped in recent months. For one thing, they have faced competition from Brazilian soybeans. And for another, quality problems with the most recent US crop have been reported," Commerzbank said in a daily market update.
There are concerns over grain and oilseed supplies from Argentina, a leading exporter of farm goods.
A strike by Argentine truck owners aimed at forcing an increase in hauling rates has halted grain unloading at some of the country's terminals, Guillermo Wade, manager of the Chamber of Port and Maritime Activities, said on Wednesday.
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