U.S. wheat rose for a third straight session on Thursday, hitting a 3-1/2 month high and increasing its premium over corn to the largest in more than three years amid strong export demand and supply risks in major producing countries.
Profit-taking late in the trading session took wheat off its highs, while farmer selling and an active planting pace in the southern U.S. Plains also limited gains, traders said.
"In the near term, it's going to be hard to feed the bull," said Mike Zuzolo, analyst at Global Commodity Analytics.
Soybean futures jumped one per cent and corn edged slightly higher, with soy rebounding from a 19-month low and corn a three-year low hit amid ongoing harvests of big U.S. crops and plentiful global supplies.
The United Nations' Food and Agriculture Organization said global food prices were the lowest in three years even as the agency reduced its global wheat forecast due to poorer prospects for South America's crop.
Chicago Board of Trade wheat for December delivery settled 3-1/4 cents higher at $6.89-1/4 per bushel after earlier rising as high as $6.98 -- the highest level since June 21 (all figures US$).
Kansas City Board of Trade wheat gained for the ninth straight day -- the longest streak of higher prices since December 2011 -- but futures briefly traded lower before finishing 0.5 cent higher at $7.55.
U.S. farmers were said to have sold old-crop wheat supplies during Thursday's session, while growers have planted almost half of the new-crop winter wheat crop.
"We are seeing some follow-though technical buying. The FAO numbers that came out reduced global wheat production in another reminder that we are still seeing problems in South America, particularly Argentina," said Terry Reilly, analyst at Futures International.
Lower output in Argentina led its neighbour Brazil to ramp up wheat purchases from the United States. Brazil's wheat crop was also damaged by frost. Additionally, top wheat grower China increased imports of U.S. wheat to stem a domestic shortfall.
"U.S. wheat stocks are fairly tight, and from the global perspective the tone of stories has been relatively friendly for the market," said Brett Cooper, senior markets manager at INTL FCStone Australia.
"There is a frost threat in Australia on Friday and Saturday, in New South Wales."
Rains in the United States were expected to stall the harvest of a record-large corn crop and the fourth-largest soybean crop on record. The big harvests earlier this week pressured corn prices to a three-year low and soybeans to a 19-month low.
Larger corn supplies and tighter wheat supplies resulted in wheat's premium over corn climbing to the highest level since September 2010.
"There's definitely a stronger global demand for wheat than corn," Reilly said.
CBOT December corn ended 1/4 cent higher at $4.39-1/4 per bushel. Soybeans for November delivery were up 13-1/4 cents at $12.88-1/4, lifted for the second straight session by two per cent gain in soymeal futures.
Investment funds were said to have bought 5,000 soybean contracts, trade sources said. The funds were "even" in corn and wheat futures, meaning they sold and bought roughly the same amount of contracts.
The continued shutdown of the U.S. federal government, due to a political standoff over the budget, meant that the U.S. Department was closed and would not publish weekly export data on Thursday, depriving the market of a major demand indicator.
-- Michael Hirtzer reports on grain and livestock commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.