Farmers and investors are booking profits from a worldwide rally in food grains, but agricultural veterans see potential setbacks.

Consumers, meanwhile, have yet to feel a pinch at the checkout aisle. Global food prices rose about 1 percent in February, but are 10 percent below their 2011 peak, according to the U.N. Food and Agriculture Organization Index. 

Futures in corn, soy and wheat have been steadily climbing. Corn, which has been in tight supply, closed down 2 cents to $6.58 a bushel on Tuesday after a 2 percent rally the day before -- its biggest gain in three months, bringing it to a six-month high. Soy continued its three-month streak of record highs, finishing up 9 cents to $13.44 a bushel as a South American heat wave kept supplies tight, the Wall Street Journal said.

Even wheat, despite its abundance, has been rising, up 2.75 cents to $6.54 a bushel on Tuesday. Partly that reflects a forecast from Ukraine, a top world wheat producer, of a diminished forecast. The country's agriculture ministry cut its 2012 wheat harvest forecast to 14 million metric tons, down from 2 million, after drought and frost hurt winter plantings, Reuters said.

Meanwhile, soybeans will face growing pressure from limited supplies, as South America continues to weather a drought that has diminished prospects for a good year.

Brazil, the world's largest soybean producer, has seen estimated losses of up to $2.8 billion in some areas known for bountiful soy production. The nation's National Food Supply Co. lowered its forecast for soy to 68.7 million metric tons to 69.2 million, an 8.7 percent fall from last year, according to the Journal.

The USDA estimates the dry weather has cost Brazil 9 percent of its potential crop in the last three months, with Argentina short 11 percent in the same period.

I think we're really only now coming to appreciate the magnitude of the losses, Laercio Pilau, a grower and head of a regional farm association in Rio Grande do Sul, told the Journal.

Global production of soy is expected to fall 7 percent this year, according to Erin FitzPatrick, an analyst for Rabobank.

Lawmakers could push for imposing tariffs or limiting exports in an effort to suppress local prices, as India did last week with a ban on all cotton exports.

On the other hand, the rally could fizzle.

The outlook for corn, the U.S.'s largest crop, remains dicey at best. The U.S. Dept. of Agriculture projects more acres of the yellow grain will be planted this year than at any point since World War II. It could spell a bountiful harvest, after two years of falling yields.

More plantings are likely to boost U.S. stockpiles, which is keeping a lid on the prices, Ker Chung Yang, analyst at Phillip Futures in Singapore, told Reuters.

The increase in plantings has many farmers holding back on selling, with corn for December delivery down 18 percent from a year before. Many anticipate growing demand for U.S. corn from China, as the world's No. 2 corn supplier Argentina endures a drought and may put a cap on exports to keep local prices low.

The U.S. winter wheat crop is expect to get an early start as meteorologists forecast another two weeks of unseasonably warm weather in the Midwest and Plains. The upshot could boost the winter and spring wheat harvests.

Beyond estimates of harvest sizes lie a number of variables that could drive prices up or down, including inflationary pressure from China, an as-yet tentative U.S. economic recovery and uncertainty over government subsidies, which face increased scrutiny in both the U.S. and Europe as those regions struggle with soaring budget deficits.

We are in a volatile state. That's going to be the case for some time to come, Pat Westhoff, director of the Food and Agricultural Policy Research Institute, told the Wall Street Journal. The Institute warned Congress last week that many of the factors that caused recent price swings remain in flux.