SINGAPORE: Benchmark US corn futures for May eased slightly on Tuesday after rallying 2 percent a day earlier on expectations of Chinese purchases, while soy was firm at multi-month highs on lower supply from South America.
Old-crop corn put in its biggest rally in almost 3 months on Monday, helped by tight supplies of grain harvested last autumn and amid talk of China buying to cover a shortfall in domestic supplies.
Chinese feed mills are keen on importing US corn as domestic prices of the grain are at a steep premium to imports, although cash traders could not confirm that any new deals have been signed.
But new-crop corn has come under pressure on forecasts of higher plantings in the United States.
"More plantings are likely to boost US stockpiles, which is keeping a lid on the prices," said Ker Chung Yang, analyst at Phillip Futures inSingapore.
Chicago Board of Trade corn for May delivery fell half a cent to $6.59 a bushel by 0237 GMT, while new-crop December corn lost 1-1/2 cents to $5.67 a bushel, in negative territory so far this month after finishing lower in February.
May soybeans rose 0.4 percent to $13.40-1/4 a bushel, not far from Friday's high of $13.55-1/2 a bushel, the highest since September 21 on a continuation chart. May wheat gained 0.2 percent to $6.52-3/4 a bushel.
"Soybeans are holding firm at multi-month highs on tight supplies even though there is no fresh fundamentals news at the moment," said Ker.
Adding to the bullish tone for corn on Monday was news from Argentina where the government is modifying its unpopular corn export system, scrapping incremental quotas that farmers said depressed prices but keeping a cap on total sales abroad to ensure domestic needs are met.
December corn futures have been held back by bull spreading due to expectations for a big jump in US seedings this spring that are expected to nearly double stocks of the grain. Current forecasts have stocks shrinking to a 16-year low by the end of the summer.
Analysis firm Informa Economics has raised its US corn seeding estimate to 95.5 million acres (38.7 million hectares) from 94.7 million acres. Informa also bumped up its forecast for US soybean plantings to 75.1 million acres from 74.6 million acres.
The US Midwest grain belt has warmed up this week, an early sign of spring, which may give farmers the opportunity to get started early on planting.
The US Department of Agriculture will issue results of its first survey-based acreage estimates in its so-called planting intentions report on March 30.
Soybeans have been supported by lower supplies from Brazil and Argentina following a drought in the crucial growing phase in January and February.
The USDA said in its report on Friday the drought had reduced the soybean crop in Brazil, the world's No. 1 exporter, by 9 percent in the past three months and the crop in Argentina by 11 percent.
Commodity funds bought an estimated net 13,000 Chicago Board of Trade corn futures contracts on Monday, trade sources said. They bought 3,000 wheat and sold 3,000 soybean contracts.
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