U.S. wheat climbed to an 11-week high on Wednesday on bets that slow grain shipments out of the Black Sea region could help maintain the brisk pace of U.S. exports.
Soybeans also gained at the Chicago Board of Trade, rebounding from a recent 19-month low on light investment fund buying of agricultural commodities. Corn ended flat, just above the three-year low notched overnight.
"The renewed optimism in the export sector continues to provide support (for wheat prices). The only caveat is that we need confirmation pretty soon -- and that may be hard to come by," said Shawn McCambridge, an analyst at Jefferies Bache.
The U.S. Department of Agriculture is shut down due to the budget impasse in Washington and is not issuing any reports, including daily announcements of export sales larger than 100,000 tonnes or the suite of export sales data that typically comes out on Thursdays.
Heavy rains in Ukraine will reduce winter grain sowing areas and slow exports, the country's agriculture minister told Reuters this week. Exports also slowed out of Russia last month.
The Black Sea countries have routinely undercut offers from the U.S. in recent years, capturing wheat export business to top buyers such as Egypt. The slowdown in exports from that region could push some demand to the U.S.
Only four months into the marketing season, after large sales to Brazil and China, U.S. exporters have already sold half of the 29.9 million tonnes of wheat forecast for export this year by USDA.
Wheat futures have declined on only two days in the past two weeks. CBOT wheat for December delivery settled 4-3/4 cents higher at $6.86 per bushel while Kansas City Board of Trade December wheat gained 10 cents, or 1.3 per cent, at $7.55 (all figures US$).
"Although (wheat) planting is progressing under better-than-usual conditions, the old crop is in good demand for its protein and the new crop has all the attendant uncertainties ahead of it," analyst Richard Brock said in a note to clients.
The U.S. winter wheat crop was 39 per cent seeded as of Sunday, on par with the five-year average planting pace of 40 per cent, USDA said earlier this week.
Corn hovering near three-year low
Investment funds were said to have purchased 3,000 contracts of both wheat and soybeans and were even in corn futures, trade sources said.
The ongoing U.S. corn and soybean harvests continued to weigh on prices for the crops, even as futures stabilized after falling the most in months earlier this week.
CBOT December corn settled unchanged at $4.39 per bushel after earlier falling to $4.35 -- the lowest level since September 2010.
Soybeans for November delivery gained 5-3/4 cents to $12.73-3/4 per bushel, with support from a two per cent bump in soymeal futures. Soymeal gained in the wake of several tenders out of South Korea, which has purchased 209,000 tonnes of soymeal from global buyers so far this week.
"There is some bargain-hunting supporting soybeans today, but they are still very close to their lows," one European trader said.
A USDA report released on Monday before the government shutdown said existing U.S. corn and soy supplies were much larger than analysts had anticipated, providing a cushion amid the slowest harvest in four years.
"Corn prices are facing an increasingly bearish outlook with higher-than-expected oil crop stocks and new-crop harvest pressure," Rabobank said in a report.
Statistics Canada on Friday will issue its second report this year on crop production and yields.
Commodity brokerage INTL FCStone on Tuesday raised its forecast for U.S. 2013 corn production to 14.150 billion bushels from 13.942 billion.
-- Michael Hirtzer
reports on grain and livestock commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.