U.S. wheat futures rose for a sixth straight session on Thursday on robust demand from domestic livestock feeders and exporters, which booked their biggest weekly sales in two years last week.
Corn prices climbed for the fifth time in six sessions, supported by concerns about tight old-crop supplies and a weaker U.S. dollar, which makes the grain more competitive on the world market.
Soybeans fell for a third straight session on South American harvest pressure and concerns about slowing import demand from top buyer China.
"The demand for wheat has picked back up. We had good, solid wheat export numbers this morning. Corn and wheat are roughly on par in value so we're seeing more wheat feeding and we're seeing some wheat trickle into the ethanol market in the eastern corn belt," said Karl Setzer, an analyst with MaxYield Cooperative.
"There's a little bit of the risk premium coming out of the soybeans. There's not as much concern today as there was three months ago over depleting soy inventories," he said.
Chicago Board of Trade (CBOT) May-delivery wheat rose 14-3/4 cents to a two-week high of $7.24-3/4 per bushel, a 2.1 per cent gain that was the strongest in two months. March futures expired at noon at $7.14-1/4, up seven cents (all figures US$).
May corn added 6-1/4 cents, or 0.9 per cent, at $7.16-1/2 a bushel, while May soybeans fell 11-1/2 cents, or 0.8 per cent, to $14.35-1/2 per bushel. March corn expired 8-1/2 cents lower at $7.32-3/4 and March soy expired at $14.57-1/4, down 17-3/4 cents.
Commodity funds bought an estimated net 8,000 corn contracts and 4,000 wheat contracts on the day and sold a net 5,000 soybean contracts, trade sources said.
Weekly U.S. Department of Agriculture data showed a net 888,500 tonnes of wheat export sales for the current marketing year and 198,500 tonnes for the next marketing year. Combined sales were the largest for a single week since February 2011.
Russian plans to buy wheat on the domestic market from August to October to replenish depleted stocks were also supportive, as the move could limit some competition for U.S. wheat from low-cost Russian grain.
The rally in wheat has taken it away from its lowest level in nine months, struck last week when prices fell on weak demand and improved conditions in the drought-hit U.S. grain belt.
Demand for feed-grade wheat has firmed since then, following corn's rise above wheat after USDA pegged corn end-of-season stocks for the 2012-13 year at a 17-year low.
U.S. soybean futures have come under pressure from a rapidly advancing South American harvest. Traders said Brazilian beans were now being offered at prices competitive enough to appeal to traders, despite a backlog of shipments.
Brazilian dock workers postponed a 24-hour nationwide strike planned for Tuesday (March 19) to allow more time to negotiate with the government. The move eased concerns about worsening shipping delays as Brazil aims to export its record-large crop.
Concern about slowing Chinese demand for soybean imports also weighed on the market.
"We're seeing better movement of beans coming out of Brazil and a sense of relief moving into the market," said Sterling Smith, a futures specialist with Citigroup.
"I could see bean exports going the way of corn, drying up rather dramatically and heading more to domestic use."
The U.S. soybean crush has already been strong. The National Oilseed Processors Association's monthly crush data, scheduled for release on Friday, was expected to show the crush in February at 141.6 million bushels, according to a poll of seven analysts, which would be the largest for the month since 2010.
-- Karl Plume writes for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.