U.S. grain and soybean futures ended mixed Wednesday, with prices trading on both sides of unchanged levels, as traders reduced risk ahead of Thursday's government crop reports.

Trading was choppy, with the consolidation of market positions featured. Traders were unwilling to hold large positions heading into U.S. Department of Agriculture's update on world production and the balance between U.S. supply and demand reports.

The USDA will release the reports Thursday at 8:30 a.m. EST.

Traders were unwilling to take risks ahead of the report, as recent reports have been highly unpredictable.

In general, traders and analysts are anticipating the USDA will report smaller world production, resulting in increased U.S. exports and smaller end of year inventories.

"However, traders have become all too accustomed to expecting bullish reports from USDA, only to have those expectations dashed," said Arlan Suderman, analyst with Farm Futures, an agricultural publication.

As such, tensions are high for the February report, as it may have significant implications for the rest of the spring, he added.

The USDA's report will highlight the impact of drought on corn and soybean crops in South America, and to what extent U.S. exports could increase as a result.

The shift could have the greatest impact on U.S. corn supplies, according to analysts surveyed by Dow Jones Newswires. On average, analysts project the USDA will estimate U.S. corn stockpiles of 797 million bushels when the crop marketing year ends Aug. 31, down from a January estimate of 846 million.

The shift is expected because corn supplies in Argentina, a key exporter, are dwindling thanks to a hot, dry summer there. With fewer opportunities to buy from Argentina, buyers should have to turn to the U.S. instead.

Meanwhile, traders said light price pressure resulted from the U.S. dollar rallying from early weakness. A firmer dollar is supportive commodities, as it makes U.S. supplies more expensive for world importers.

CBOT March corn ended up 1/4 cent at $6.42 1/2 per bushel. CBOT March soybeans ended 1/2 cent lower at $12.31 1/2 a bushel.

CBOT March wheat ended down 1 1/2 cents to $6.60 3/4 per bushel, MGEX wheat closed up 3 1/2 cents to $8.41 1/2, and KCBT wheat ended down 2 cents to $7.10.

Other Markets

CBOT March soyoil ended up 0.41 cent to 52.58 cents a pound, and March soymeal ended down $3.70 at $321.70 per short ton.

Ethanol for March delivery ended up 0.6% to $2.224 per gallon. Oats for March delivery finished up 1/4 cent at $3.28 a bushel.

-By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604 begin_of_the_skype_highlighting 312-347-4604 end_of_the_skype_highlighting; Andrew.johnsonjr@dowjones.com