Corn holds gains on tight supply ahead of USDA report

PARIS/SINGAPORE: Chicago corn edged higher on Friday, holding on to sharp gains from the previous session as strong demand and weather risks kept the focus on tight supply ahead of closely watched US government forecasts.

Wheat continued to track strength in corn while also finding support in adverse weather in some growing regions.

Soybeans were little changed as traders adjusted positions before the US Department of Agriculture's (USDA) monthly supply and demand report at 1600 GMT.

The most active corn contract on the Chicago Board of Trade (CBOT) was up 0.3% at $5.81-1/4 a bushel by 1130 GMT, trading close to last week's almost eight-year peak of $5.85.

Corn climbed on Thursday after the US Energy Information Administration reported corn-based ethanol stocks at the lowest level since November and as rain forecast for much of the US Midwest threatened to hamper planting.

The need to replenish ethanol stocks could add to strain on corn supplies after a strong export season.

Overseas demand has been boosted by rising Chinese imports. The country's agriculture ministry on Friday more than doubled its forecast of 2020/21 corn imports to 22 million tonnes, bringing it closer to market estimates.

CBOT wheat was up 0.6% at $6.32-1/2 per bushel, continuing its rebound from a 2021 low struck last week.

"It's one following the other after corn started to get expensive against wheat," said Benjamin Bodart of consultancy Agritel.

Dry weather ahead of spring wheat planting in North America and cold, dry conditions in western Europe were also tempering recent optimism about northern hemisphere wheat harvests.

CBOT soybeans were up half a cent at $14.15.-3/4 a bushel.

Traders were weighing up signs that a rain-delayed Brazilian soybean harvest was starting to flow onto export markets against persistent tensions in oilseed markets, partly owing to high prices for vegetable oils and biodiesel.