U.S. corn futures rose on Wednesday in reaction to firm export demand and to traders exiting bearish bets as the feed grain traded near three-year lows, traders said.
Wheat and soybean futures closed lower with soybeans under pressure from the ongoing U.S. harvest. A mild round of profit-taking weighed on wheat prices, which held near 3-1/2 month highs after a recent rally.
The partial shutdown of the U.S. federal government cut volume in the grains market as the U.S. Agriculture Department was not issuing its regular reports that traders use as a basis for trading.
Traders said the wheat market retained its bullish tone, despite the setback, amid continued signs of good demand from overseas buyers.
Corn's strength stemmed from news that a private Chinese trading firm bought a total of 420,000 tonnes of U.S. corn last week for delivery next year in order to take advantage of cheap U.S. prices.
The Chinese foray into the export market raised the prospect of more purchases.
"I do not think it is a one-and-done," said Sterling Smith, futures specialist with Citi in Chicago. "I think we will see them back in the market."
Chicago Board of Trade corn for December delivery closed up 1-3/4 cents at $4.43-1/2 a bushel. The December corn contract peaked at $4.47 early in the trading day but struggled to hold support above its 10-day moving average of $4.45-3/8 (all figures US$).
Gains were kept in check by forecasts for dry weather that will help harvest in key production areas of the United States.
"This is going to be weighed against the very good weather over the next three or four days which should result in very good harvest progress," Smith said. "Those combines will be rolling full speed. Guys get a window of good weather, they really are going to be hammering those good fields."
CBOT December soft red winter wheat was down three cents at $6.90-1/2 a bushel.
Algeria's state grains agency OAIC bought 500,000 tonnes of optional-origin milling wheat in a tender, European traders said. Most of the wheat will likely be sourced from France.
CBOT November soybeans dropped one cent, to $12.87-1/2 a bushel.
"Prices are down as the harvest pace picks up," said Vanessa Tan, investment analyst at Phillip Futures in Singapore. "Right now it is warm and dry and that will allow the farmers to accelerate their harvest."
Expectations for a record large crop in Brazil also weighed on the soybean market. Brazil's government crop supply agency Conab forecast harvest for the 2013-14 crop year between 87.6 million and 89.7 million tonnes.
-- Mark Weinraub is a Reuters correspondent covering grain futures markets in Chicago. Additional reporting for Reuters by Colin Packham in Sydney.