CANBERRA: Chicago corn futures climbed on Wednesday and were near their highest levels since June 25 after the U.S. Department of Agriculture said U.S. end-of-season corn stocks would drop to a two-year low, well below analysts’ expectations.

Soybean futures were flat, with expectations for a large South American supply offsetting a higher USDA estimate for U.S. soyoil exports.

Wheat rose on cuts to the USDA’s estimates for European Union and Russian production.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.1% to $4.49-1/2 a bushel by 0414 GMT after reaching $4.50 on Tuesday when the USDA report was released.

CBOT soybeans were flat at $9.95 a bushel and wheat climbed 0.5% to $5.64-1/2 a bushel.

Plentiful supply pushed all three contracts to four-year lows earlier this year and prices have struggled to regain ground.

However, low U.S. prices have attracted buyers. The USDA raised its estimate for 2024/25 U.S. corn exports to the second-highest levels on record and increased its forecast for how much corn will be used to produce ethanol.

Corn holds near its highest since June on expected decline in US stockpiles

The result of that improved demand was a reduction in the USDA’s projection for U.S. corn ending stocks to 1.738 billion from its previous estimate of 1.938 billion bushels - far below analysts’ expectations of 1.906 billion bushels.

Commodity funds that had already turned positive on CBOT corn prices in recent weeks were big net buyers of contracts on Tuesday, traders said, helping push prices higher.

“The Global economy was meant to slow down and consume less grain, but that hasn’t happened,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.

But he said prices were likely to fall back. “There’s still plenty of corn… the rally has got a bit ahead of itself.”

For soybeans, the USDA pegged 2024-25 U.S. ending stocks at 470 million bushels, unchanged from November, but raised its forecast for U.S. soyoil exports to 1.1 billion pounds from 600 million pounds following strong sales.

In wheat, the U.S. is likely to have 795 million bushels at the end of the season, the USDA said, cutting its forecast from 815 million bushels a month ago.