CHICAGO: Chicago wheat futures dipped on profit-taking early Tuesday, after India said it would allow overseas wheat shipments awaiting customs clearance.

But wheat soon firmed as traders focused on an unrelenting question that continues to roil global prices: Where will the world get its grain? The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 17 cents at $12.64-1/4 a bushel at 10:49 a.m. CT (1549 GMT) - while in overnight trading, the July contract came within 3 cents of a record-high.

India banned wheat exports on Saturday, just days after saying it was targeting record shipments of 10 million tonnes this year, as a scorching heatwave curtailed output and domestic prices hit a record high.

The government had said it would only allow exports backed by letters of credit (LCs), or payment guarantees, issued before May 13, leaving some 1.8 million tonnes of grain trapped at ports. Wheat also received support from a US Department of Agriculture report late Monday, indicating worsening condition of the US winter crop, deepening worries about supply in an already-tight market.

The USDA rated 27% of the US winter wheat crop in good to excellent condition, down 2 percentage points from the previous week and below analysts’ expectations, while spring wheat was 39% planted, below expectations of 43%.

Meanwhile, corn futures slipped as investors were buying wheat and selling corn in spread trades, after USDA reported that corn planting progress was improving, said Don Roose, president of Iowa-based US Commodities.