By Jesse Newman

CHICAGO--U.S. grain and soybean futures fell on Wednesday as the dollar recovered amid steadier global markets, heightening demand concerns, and as optimism over U.S. crops increased.

Wheat prices declined to a nearly four-month low, falling after a brief rally earlier in the week, as a rising U.S. dollar intensified worries over demand for U.S. supplies of the crop. Prices for the grain swung higher on Monday and Tuesday after dropping sharply the previous week, but analysts said the wheat market struggled to hold onto gains amid ample world supplies and stiff competition for world export business.

"Global supplies are too big for the light demand that is surfacing in the export markets, and the U.S. stocks will continue to build," said analysts at Kansas City, Mo.-based commodity brokerage INTL FCStone in a note to clients.

A higher U.S. dollar makes U.S. commodities like wheat more expensive for foreign buyers. The dollar rose 0.5% against a basket of international currencies on Wednesday.

Analysts said traders and investors are, however, keeping a close eye on dryness as planting begins in the Black Sea region, a major grain-producing region.

Wheat futures for September delivery declined 13 1/4 cents, or 2.7%, to $4.70 3/4 a bushel at the Chicago Board of Trade, the lowest intraday price since May 8.

"The big thing going on in grain market is that nobody sees a reason to be a buyer right now," said Dale Durchholz, a senior market analyst at risk-management firm AgriVisor in Bloomington, Ill. Global grain stockpiles are "comfortable," Mr. Durchholz said, though he cautioned that they get less so without China's grain inventories, which may not be available to the world market.

Corn prices dropped to a three week low, buffeted by largely favorable weather and worries over demand for the crop. The early U.S. harvest and benign end-of-season conditions also weighed on corn prices.

"We don't have any really significant weather events" in the forecast, said Mr. Durchholz, and "no one out there has a reason to worry about the crop."

CBOT September corn fell 2 1/4 cents, or 0.6%, to $3.53 3/4 a bushel, the lowest intraday price since Aug. 12.

Meanwhile, soybeans extended losses, pressured by a wetter outlook for the U.S. Midwest in the next five days, which would aid end-of-season plant development. Falling crude oil prices also pressured the soybean market, as lower oil prices tend to discourage refineries from blending fuel additives into gasoline including biodiesel, for which soybeans are a main ingredient.

CBOT September soybeans shed 6 1/4 cents, or 0.7%, to $8.78 1/2 a bushel.

Write to Jesse Newman at jesse.newman@wsj.com

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(END) Dow Jones Newswires

September 02, 2015 11:49 ET (15:49 GMT)