Corn holds near 3-1/2 month peak as crop outlook, demand assessed

PARIS/SINGAPORE: Chicago corn futures were steady on Thursday, holding near a 3-1/2 month high as hot weather and a smaller than expected plantings estimate raised doubts about harvest prospects.

Soybeans stayed firm and reached a new four-month high, also supported by a lower than anticipated acreage estimate in the US Department of Agriculture's closely watched planting report this week, as well as investor optimism about economic recovery from the coronavirus crisis.

Wheat was little changed as traders sought a clearer picture of northern hemisphere harvesting.

Grain markets were also awaiting weekly US export sales data for a demand update.

The Chicago Board of Trade most-active corn contract was up 0.2% at $3.61-1/4 a bushel, as of 1204 GMT.

It earlier equalled Wednesday's 3-1/2 month high of $3.63, with analysts saying the market remained burdened with large supplies after the coronavirus epidemic hurt demand.

"Lower-than-expected planting supported corn prices but the key challenge for corn is demand destruction," said Phin Ziebell, agribusiness economist at National Australia Bank in Melbourne.

Corn has been particularly affected by a drop in consumption of corn-based biofuel ethanol amid a broad plunge in energy markets as the pandemic developed earlier this year.

The US Department of Agriculture (USDA) estimated farmers planted 92 million acres of corn this spring, lower than the USDA's March forecast of 97 million acres, the biggest March-to-June drop since 1983.

CBOT soybeans added 0.3% to $9.01-1/2 a bushel after edging up to a new high since early March at $9.03.

Wheat fell 0.3% to $4.97-1/2 a bushel.

Hot, dry weather forecasts across the US Midwest have also elevated concerns about crop stress as US corn and soybeans move into key summer growth stages.