Corn and wheat closed lower on some mild profit taking on strong gains earlier this week. But the declines were limited as few investors were eager to stake new positions ahead of the U.S. Labor Day weekend.

Soybeans' move to a new high of $17.80-3/4 during Thursday's session showed the summer-long bull market had not ended and demand remained firm for soybeans at current price levels.

"The market is recognizing that we have another crop in this country with low production numbers," said Nicole Thomas, analyst with McKeany-Flavell. "It seems like its one of those markets where you ... need to take it up another 50 cents to $1.00 before you see some significant rationing. Arguably, it has got a little more strength to it."

Trend-line analysis of soybean charts indicated that prices could reach as high as $18.14 a bushel before the soy harvest kicks into gear in the Midwest, said Ted Seifried, senior market analyst with the Zaner Group. Prices typically peak just before combines start to roll.

"From a technical level, it looks like soybeans still have a little bit more left in the tank," Seifried said. "We could be two or three weeks away from putting a high in. We are in uncharted territory."

Chicago Board of Trade November soybeans settled up 10-1/2 cents at $17.63-1/2 a bushel. December wheat futures fell 2-3/4 cents to $9.03 bushel. CBOT December corn ended 5 cents lower at $8.08-1/2 a bushel.

Traders were closely watching weather forecasts as expected storms could further harm the drought ravaged corn crop.

"They do not know how much damage the heavy rains may cause," said Mike Zuzolo, president of Global Commodity Analytics & Consulting in Lafayette, Indiana.

"The trade is taking a cautious approach ahead of the remnants of (Hurricane) Isaac."

Torrential rain and wind from Isaac likely harmed some rice, cotton, soybean and sugarcane crops in the Deep South, but the rains will also bring relief to farmers struggling with the worst drought in more than 50 years, an agricultural meteorologist said on Thursday.

"The deficits are so great that it will take up to 10 or 15 inches of rain over a longer period of time to replenish soil moisture supplies," said Andy Karst, meteorologist for World Weather Inc. "However, this will help and it will bring some rivers back up and help speed up barge traffic."

Two to 4 inches (5 to 10 cm) of rain can be expected in portions of the central Midwest through the weekend, Karst added, which could delay harvest in those areas.

Flooded fields could harm the crops as they near harvest. Additionally, high winds could knock down corn in fields, a particular concern due to poor stalk development during the drought.

Soybeans garnered additional support from signs that exporters have not begun to ration their demand despite the high prices and expectations for a small U.S. harvest.

The U.S. Agriculture Department said weekly export sales of soybeans totaled 721,400 tonnes, near the high end of forecasts for 600,000 to 800,000 tonnes. Wheat exports also came in line with expectations, but export sales of corn dropped below market forecasts.

Traders also awaited word on whether Russia will curb grain exports as drought has cut harvest expectations below 2010 levels. A punitive tax on exports is a likely option as soon as October, according to a survey of international grain traders conducted by Reuters.

SovEcon agricultural analysts on Thursday cut their forecast for Russia's 2012 wheat crop to 38 million tonnes, from a previous estimate of 39 million, to reflect deterioration of yields in a widespread drought.