Corn near 8-year high, wheat steadies as weather watched

PARIS/SINGAPORE: Chicago corn rose on Tuesday to hold near an eight-year high, as weather forecasts showed little sign of rain relief for dry southern Brazil, keeping attention on global supply tensions despite US planting progress.

Wheat edged up after dropping more than 2% on Monday as the corn rally underpinned wheat prices, countering pressure from favourable signs for some northern hemisphere wheat harvests, including in Ukraine.

Soybeans edged higher as tight oilseed inventories kept the market supported in the face of concern over reduced vegetable oil demand in India due to a surge in coronavirus cases.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 1.9% at $6.92-1/4 a bushel by 1059 GMT, after reaching its highest since March 2013 on Monday at $6.98.

A weather focus and investment fund flows after recent highs were making trading choppy, traders said.

"Corn remains bullish in Chicago on the back of tight supplies," consultancy Agritel said.

"In Brazil, the dry weather is still predominant and maize crops are suffering at the beginning of the dry season."

Broker StoneX on Monday estimated Brazil's 2020/2021 second corn crop at 72.7 million tonnes, compared with 77.65 million previously.

Brazil's second annual crop is seen as crucial to boosting short-term availability ahead of the US harvest later in the year.

As of Sunday, 46% of US corn plantings were complete, the US Department of Agriculture (USDA) said on Monday, topping analysts' expectations of 44%.

Cool temperatures could slow early corn growth in the Midwest but forecast rain should benefit crops, analysts said.

Grain markets are also looking ahead to the USDA's May crop report that will include the agency's first full supply-and-demand projections for 2021/22.

"Importers are waiting for the US government's supply-demand report due next week for a price direction," a Singapore-based feed grain trader said.

CBOT wheat was up 0.5% at $7.21-1/2 a bushel, after closing down 2.3% in the previous session. Soybeans added 0.8% to $15.36 a bushel.

US soybean planting was 24% complete, slightly above a poll average estimate of 25%.