PARIS/CANBERRA: Chicago wheat, corn and soybeans edged down on Wednesday as a bounce fuelled by short-covering subsided and expectations of ample global supplies hung over the market.

A steadying in the dollar index after a drop a day earlier, along with an easing in oil prices, encouraged Chicago grains to consolidate.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.8% at $5.74-3/4 a bushel by 1115 GMT, after rallying more than 3% on Tuesday to recover from a three-month low.

CBOT soybeans were down 0.5% at $11.72-3/4 a bushel, while corn ticked down 0.2% to $4.17-3/4 a bushel.

Corn and soybeans were trading near three-year lows struck in the past week.

Russian wheat export prices fall

Grain prices have been pressured this year by large supplies of Russian wheat, a record US corn harvest and the easing of drought risks to upcoming South American harvests.

Tuesday’s rally was seen by analysts as a possible sign the market is bottoming out, with investment funds sitting on heavy short positions and the sensitive spring weather period for northern hemisphere crops approaching.

But upside potential was still seen as tentative given broadly favourable crop prospects in major production zones.

“The world is moving slowly back to a period of higher inventories, with Russia expected to produce a larger wheat crop this year,” said Andrew Whitelaw at consultants Episode 3 in Canberra.

In Brazil, analysts have downgraded projections for soybean production after earlier drought, but recent rain has eased concerns about soy yields and subsequent planting of the second corn crop.

By last Thursday, 32% of Brazil’s planted soybean area had been harvested, according to consultants AgRural, up 9% from a week earlier and ahead of last year’s pace.

Grain markets are also watching for signs of renewed demand from China following last week’s Lunar New Year holidays and as the government tries to revive a property sector that has cast doubts over China’s wider economy.