CHICAGO: US soybean futures rallied to a fresh seven-month high on Thursday on concerns about a smaller South American harvest, which could shift more global demand to the United States.

Wheat slumped for a second straight session on a stronger dollar and slightly lessened fears that Russia would invade Ukraine and potentially disrupt grain shipments from the Black Sea region.

Corn traded both higher and lower during the session, dragged by rising soybeans and sinking wheat.

“You’ve got a tug of war going on between the soybeans and the wheat, and corn is caught in the middle,” said Ted Seifried, chief agriculture strategist for the Zaner Group.

“Beans are going higher based on concerns about production, which could mean more exports for the US ... Today is also a big statement day for the dollar and that puts a lot of pressure on wheat, which in turn holds the corn down.”

The greenback soared to its highest levels since July 2020 against other major currencies on Thursday, making dollar-denominated commodities costlier for global buyers. Wheat is particularly sensitive to the currency headwinds.

Grain traders are watching weather and harvest conditions in South America after drought eroded yield potential in key crop production areas of Brazil and Argentina.

Some areas have received rain recently, but the damage has been done. One forecast projected a 35% drop in soy output in Brazil’s Parana state this season. Investors are also monitoring tensions between Russia and the West amid fears of a possible Russian invasion of Ukraine.