By Jacob Bunge

CHICAGO--U.S. wheat and corn futures settled higher Thursday, lifted by a decline in the U.S. dollar. Soybean contracts fell.

A 0.47% decline in the greenback's value versus a basket of international currencies tracked by the WSJ Dollar Index helped Chicago wheat futures close 0.8% higher, though the market gave up some earlier gains.

Consideration of U.S. wheat in a widely followed Egyptian grain tender helped support contracts, reflecting the idea that even if foreign buyers don't purchase American grain, it is at least in the running as grain supplies run high around the world.

"It's becoming more competitive into the global market, provided we don't rally," said Mark Schultz, chief analyst at Northstar Commodity Investment Co. in Minneapolis.

While high-quality U.S. wheat continues to draw demand, Mr. Schultz said, wheat with low protein content still tends to struggle against foreign-grown versions that can be cheaper. When U.S. wheat prices rise too much, they fall out of contention, he said.

For that reason, wheat futures got a boost as the U.S. dollar eased against rival currencies. A stronger U.S. dollar typically makes agricultural commodities more expensive on international markets, and has worked against exports, contributing to higher domestic supplies.

March-dated wheat futures settled 3 1/4 cents higher at $4.04 3/4 a bushel Thursday after trading as high as $4.06 3/4 a bushel. Contracts expiring in May also gained 0.8%, settling at $4.17 3/4.

Wheat futures have swung this week, with a 4.1% increase on Tuesday followed by a 2% decline Wednesday. Trading activity has been verylow in the holiday week, which tends to exacerbate market moves, while new data to provide direction to the market has been scant. Export sales, due to be reported Friday by the U.S. Department of Agriculture, are expected to reflect slow business over the past week.

March corn futures also climbed Thursday, settling 0.4% higher at $3.49 3/4 a bushel after dipping into negative territory for part of the session. Corn futures are up about 1% so far this week after posting a big gain Tuesday and then ceding most of that Wednesday.

Analysts continue to parse South American weather forecasts for signs of trouble in key crop-growing areas, which could temper supply there. Some areas of northern Brazil have been troublingly dry, while wet conditions have challenged farmers in Argentina.

January-dated soybean futures settled 0.4% lower at $10.03 1/4 a bushel, with March contracts down nearly the same amount at $10.12 3/4 a bushel.

Write toJacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

December 29, 2016 15:40 ET (20:40 GMT)

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