CANBERRA: Chicago corn futures eased on Thursday, but remained close to a 13-month high on the US government tightening its supply outlook and hot and dry weather damaging crops in Argentina.

Soybean futures fell sharply as the market braced for record production from top producer Brazil and a rally in Chicago soyoil futures lost momentum. Wheat dipped amid lacklustre demand.

The most active corn contract on the Chicago Board of Trade (CBOT) fell 0.3% at $4.77-1/2 a bushel to 0536 GMT after reaching $4.80 on Tuesday and Wednesday, the highest since December 2023.

The market is still digesting the US Department of Agriculture lowering its estimates for 2024 US corn and soybean production and ending stocks.

Hot and dry weather threaten production in Argentina, the world’s third-biggest corn exporter.

The Rosario grains exchange on Wednesday trimmed its 2024-25 harvest forecast to 48 million metric tons from 50-51 million tons.

Heavy rain forecast for Argentina over the weekend should bring some respite, but dry conditions could return later this month, Commodity Weather Group said.

Commodity funds expanded their net long position in CBOT corn for a fifth consecutive day on Wednesday, traders said.

Corn, soybeans steady near multi-month highs

“Last Friday’s shape-shifter numbers from the USDA continue to buoy prices and there are enough weather issues on the agenda to keep crop estimates in question,” said independent analyst Tobin Gorey.

“The bullishness that a lot of people had about corn is being validated.”

Meanwhile, CBOT soybeans fell 1% to $10.32 a bushel and wheat slipped 0.6% to $5.43-3/4 a bushel.

Soybeans reached $10.64, their highest since October 2024, on Tuesday, helped by the USDA’s supply downgrades and a rally in soyoil triggered by potential change in US biofuel policy.

But CBOT soyoil dropped 1% on Thursday, breaking eight consecutive sessions of gains.

Speculators hold net short positions in both soybeans and wheat on the CBOT.