Chicago Board of Trade Wheat Futures declined on Wednesday, as world supplies were heavy and Black Sea exports were cheap. Prices fell ahead of an upcoming rail strike in Canada on Thursday.

Chicago soybeans ticked up as the U.S. Agriculture Department announced a third consecutive day of soybean sales in China. After a turbulent day, corn futures finished up as traders and hedge funds unwound their short positions.

Karl Setzer, partner of Consus Ag said that a stoppage in Canadian freight rail operations would disrupt North America’s agricultural supply chain. However, he added that a continual stream of Russian wheat exports at low prices could dampen any increase in demand for U.S. grain.

Setzer stated that if the strike occurs, "we might see an increase in demand but it could be limited due to the price differential between the U.S.

Canada is the third largest wheat exporter in the world, while the U.S. Canada is the world's No. 3 wheat exporter. The U.S. 4.

The Chicago Board of Trade's (CBOT's) most active soybean contract ended up gaining 5-1/2 cents to $9.81-1/2 a bushel. CBOT corn settled 1/4 cent higher at $4.98-1/4 a bushel. CBOT wheat ended down 13-1/2 Cents at $5.19-3/4.

Grain traders will be closely watching the Pro Farmer tour of the Midwest in the U.S. this week.

Analysts said that while results in corn and soybeans have been above average, the feedback received has not added to expectations of the upcoming harvests.

Later on Wednesday, forecasts for Illinois and the western third Iowa are expected.

The price of corn and soybeans has remained near the lows set four years ago, due to an expected bumper harvest in the Midwest and favorable weather conditions. Hedge funds are likely to exit their large short positions, as the prices appear to have bottomed out.

Joe Davis, broker with Futures International, said: "They have already made money by being short." The larger hedge funds have moved to other markets. Reporting by Heather Schlitz, Chicago; Additional reporting by Mei Mei Chu, Beijing; Gus Trompiz, Paris; and Naveen Thkral; Editing by Sonia Cheema; Jonathan Oatis, Cynthia Osteris, and Jason Neely

(source: Reuters)