Chicago wheat futures edged lower on Tuesday, giving up some of last session's gains, as a further improvement in the condition of the U.S. winter crop put attention back on ample global supply of the staple cereal.
Soybeans slipped back after rebounding from a 6-1/2-year low on Monday, as the market continued to anticipate that Argentina's incoming president would boost exports, adding to volumes from bumper harvests around the world.
Chicago corn also ticked lower.
Recent strength in the dollar, which touched an eight-month high against a basket of currencies in the previous session before easing on Tuesday, also kept up the pressure on grains and oilseeds priced in the U.S. currency.
The U.S. winter wheat crop condition was rated 53 percent good-to-excellent, up from 52 percent a week ago, the U.S. Department of Agriculture said after the market closed on Monday.
This was still below a corresponding 58 percent rating a year ago but showed that U.S. wheat plants were continuing to benefit from rainfall after suffering from dryness at the start of the growing season.
"There is bearish tone in the market as the hard winter crop condition is improving," said Kaname Gokon at brokerage Okato Shoji in Tokyo. "But we feel the market will trade in a range because of a U.S. holiday this week. The upside is limited at $5.00 a bushel for the December contract and downside is $4.80 a bushel."
Chicago grain and oilseed futures will not trade on Thursday due to the Thanksgiving holiday in the United States, with the market reopening for U.S. trading hours on Friday.
Chicago Board of Trade December wheat was down 0.6 percent at $4.95 a bushel by 1255 GMT, after climbing 1.6 percent in the last session.
The increased competitiveness of French wheat, which is set for its first shipment to Indonesia in years, has also underscored the export challenges facing U.S. wheat.
Wheat and grain markets in general have drawn sporadic support form weather concerns, including recent dryness in U.S. and Black Sea wheat belts, but forecasts for record global production in 2015/16 have kept a lid on rallies.
"We think there is some more downside in corn, wheat and soybeans. Markets are still well supplied," Hamish Smith, commodities economist at Capital Economics, said. "For now there is enough supply to offset any (weather) losses," he said.
December corn lost 0.5 percent to $3.65-1/4 a bushel, giving up some of its 1.1 percent gain in the previous session. January soybeans inched down a quarter of a cent to $8.64 a bushel.
The front-month soybean contract hit its lowest since March 2009 on Monday at $8.44-1/2 a bushel, before seeing a technical bounce.