Corn, soybeans steady near 6-year highs as South America in focus

PARIS/SINGAPORE: Chicago corn and soybeans edged up on Friday to trade near 6-1/2 year highs as the grain market continued to assess supply risks in South America due to dry growing conditions and disruption to Argentine shipments.

Rain forecast in Brazil and Argentina and slower US exports last week were limiting price gains as investors also looked ahead to world crop forecasts from the US government next Tuesday, analysts said.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.8% at $4.98 a bushel by 1148 GMT, approaching the psychological $5 threshold again after reaching a highest since May 2014 at $5.02-3/4 on Wednesday.

CBOT soybeans were up 1.1% at $13.70-3/4, after this week hitting their highest since June 2014 at $13.78-1/4.

"The market is looking for more fuel for the bulls," Michael Magdovitz, commodity analyst at Rabobank, said.

"Weather is critical and we're not in a drought situation I would see as catastrophic in South America."

Traders are watching to see if significant rainfall reaches dry parts of Argentina and southern Brazil in the coming days, averting further loss of corn and soybean yield potential.

Argentina's government said on Thursday it would review a decision to temporarily suspend corn exports, a restriction that fanned the recent price rally.

Also on Thursday, the union representing Argentine port-side grain inspectors said it had ended a month-long wage strike that has disrupted grain shipments.

Lower weekly US exports sales, particularly in soybeans, reported by the US Department of Agriculture on Thursday cooled the futures rally by suggesting high prices were curbing demand.

CBOT wheat rose with support from corn and soy, adding 0.9% to $6.47-3/4 to move back towards Tuesday's six-year peak of $6.64-1/2.

Traders were waiting for activity in Russia to resume following holidays this week to gauge the impact of measures to curb the country's exports.