U.S. wheat futures rose for the fourth day in a row on Thursday on expectations of strong world demand due to crop woes in key production areas around the globe, traders said.
Corn was pulled higher by the strength in wheat, which hit its highest in more than two months, as well as a round of short-covering. Soybeans closed lower, however, due to pressure from the ongoing harvest in the U.S. Midwest.
"You have had absolutely just tremendous exports in wheat going on here," said Dewey Strickler, president of Ag Watch Market Advisors. "If we continue the pace, we could probably reach 1.6 billion bushels compared to the U.S. Agriculture Department's estimate of 1.1 billion."
USDA said on Thursday morning that old-crop export sales of wheat were 620,200 tonnes in the latest week, which was in line with the analysts' robust expectations of between 500,000 to 700,000 tonnes. That followed last week's report that showed that exporters had loaded and shipped the largest weekly volume of U.S. wheat in at least 23 years.
Chicago Board of Trade December soft red winter wheat futures settled up 7-3/4 cents at $6.78-1/4 a bushel. Prices, which have gained five per cent during the four-day rally, peaked at $6.79-1/4, the highest since July 16.
Stepped-up purchases by Brazil and China, which was forced to boost imports after weather damaged its domestic crop, have helped strengthen the wheat market.
"In the last four weeks they (U.S. wheat exports) have averaged more than 600,000 tonnes, so only 338,000 tonnes a week is now needed to reach the USDA's (2013/14) target of 29.9 million tonnes," French grain consultant ODA said.
CBOT November soybeans were off five cents at $13.16-3/4 per bushel while December corn gained two cents to $4.56-3/4 per bushel.
Harvest advances also pressured the cash market, where basis levels for both corn and soybeans plunged in areas of the eastern U.S. Midwest where farmers have made good progress in the past few days.
Some positioning was noted ahead of USDA's quarterly stocks report next week, which weighed on soybean prices, said Nicole Thomas, a partner for McKeany-Flavell Co.
Traders said that short-covering showed up as corn prices neared the three-year low hit earlier this week.
"The large speculative short position in the market makes it vulnerable to short covering, but the increasing yield estimates and increasing harvest pace will continue to weigh on prices," Sterling Smith, a futures specialist for Citi in Chicago, said in a note to clients.
A few light showers over the next two weeks will cause only minor slowdowns in harvesting the U.S. corn and soybean crops, an agricultural meteorologist said on Thursday.
MDA Weather Services said there are no big threats to harvesting and temperatures will be above normal, so there are no threats to crops from a frost either.
-- Mark Weinraub is a Reuters correspondent covering grain and oilseed futures markets in Chicago. Additional reporting for Reuters by Valerie Parent and Gus Trompiz in Paris.