By Jacob Bunge

CHICAGO--Grain and oilseed futures slid Wednesday, giving back much of the prior session's gains as the U.S. dollar climbed.

Concerns over uncooperative weather in South America, which helped to lift contract prices Tuesday, reverted back to currency shifts and large global supplies that have weighed on prices over the past year, while investment funds held off on buying.

The shifting views on grain prices came as trading activity overall remained very light at the Chicago Board of Trade, with little new data on crop conditions or supply to provide direction to the markets.

"Some traders decided maybe to walk away from trading a weather market and basic to basic fundamentals of large-crop prospects," said Terry Reilly, senior commodity analyst with Futures International in Chicago.

Corn futures led Wednesday's declines, with March-dated contracts closing 1.9% lower at $3.48 1/4 a bushel, nearly erasing Tuesday's gain. It was another slide for corn contracts, which have declined in seven of the last ten trading sessions.

Traders attributed part of corn's fall Wednesday to long-term positions staked out in derivatives markets that corn prices would continue to remain low over the next six months, as well as a stronger U.S. dollar.

The greenback on Wednesday climbed 0.15% against a basket of international currencies tracked by the WSJ Dollar Index. A stronger U.S. dollar typically makes domestically produced crops more expensive on international markets, versus those marketed from countries with weaker currencies.

The U.S. dollar's rise also helped to drag down wheat futures, with March-dated contractssettling 2% lower at $4.01 1/2 a bushel. Projections for a big winter wheat crop in Russia contributed to wheat's decline, analysts said, though the contracts remain about 5.5% higher so far this month.

Soybean futures expiring in January fell 0.8% to close at $10.06 3/4 a bushel after rains swept through South American growing areas, helping soothe some traders' concerns over hot and dry conditions damaging crops there, which had helped push up prices Tuesday.

Despite emerging reports this week of big soybean yields in the earliest Brazilian harvests, the contracts remain nearly 2% higher since the end of last week.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

December 28, 2016 15:05 ET (20:05 GMT)

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