Corn consolidates after surge as weather, crop rating weighed

PARIS/SINGAPORE: Chicago corn futures were little changed on Wednesday, consolidating after a day-earlier jump as concerns over hot, dry weather were set against a good start to the US growing season.

Chicago wheat edged up, holding on to Tuesday's gains as dryness threatened spring wheat crops in North America.

Soybeans also stayed firm, underpinned by weather risks and rallying vegetable oil prices.

Rising crude oil prices were also supporting crop markets, which partly supply biofuel production.

Forecasts for dry, hot conditions in the coming two weeks in northern US and Canadian crop belts fuelled a rally on Tuesday as attention shifted back to tightening global availability of livestock feed grains.

"Feed supply is tight so prices are highly sensitive to almost any crop worry," Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, said.

"Brazil's second corn crop still seems to be shrinking ... and a drier trend in the US, northern Midwest and Northern Plains is a worry if not yet an actual problem."

The US Department of Agriculture on Tuesday rated 76% of the US corn crop as good-to-excellent in its first condition ratings for the 2021 crop, above the average estimate of 70% in a Reuters analyst poll.

However, prospects have diminished for the upcoming Brazilian second corn crop, crucial for supplying export markets before the autumn US harvest.

Consultancy AgRural and brokerage StoneX on Tuesday each sharply cut their forecasts for Brazilian corn production.

The most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.4% at $6.86 a bushel by 1140 GMT.

The contract rose by nearly 5% in the previous session when it touched its highest in more than two weeks.

New-crop December corn inched down 0.1%.

CBOT soybeans were up 0.4% at $15.54-3/4 a bushel, while CBOT wheat also added 0.4% to $6.96-1/2 a bushel, having closed 4.5% higher on Tuesday.

The USDA said US farmers planted 84% of their intended soybean acreage, below the average estimate in the Reuters poll of 87%.

The USDA rated 48% of the winter wheat crop in good-to-excellent condition, matching trade expectations and marking an improvement from 47% the previous week.

But the spring wheat good/excellent score slipped by 2 points to 43%, compared with an average of trade estimate calling for an unchanged rating.

Front-month spring wheat futures on the MGEX exchange were up more than 2% in overnight trading.