CANBERRA: Chicago corn futures rose on Friday and were headed for a second consecutive weekly gain, underpinned by a tighter supply outlook even as farmers responded to high prices with a flurry of sales.

Soybean futures climbed on the day, but were flat for the week as Brazil’s massive harvest ramped up and a soyoil rally hit the buffers.

Wheat rose and was on course for a weekly gain following in corn’s slipstream, but weak demand held prices near 2024 lows.

The most active corn contract on the Chicago Board of Trade (CBOT) rose 0.6% to $4.77-1/2 a bushel by 0314 GMT and is up 1.5% this week.

CBOT soybeans gained 0.7% to $10.25-3/4 a bushel and wheat climbed 0.3% to $5.39-1/4 a bushel.

Earlier in the week, corn rose to its highest since December 2023 and soybeans hit a three-month high after the US Department of Agriculture cut its estimates for US production and ending stocks. Strong US corn exports are also supporting prices.

But the rallies were met with a sales rush by US farmers which dragged prices lower and by Thursday, speculators were also selling.

Funds hold a large net long in CBOT corn, leaving the market vulnerable to long liquidation that would drag prices.

Corn hovers near 13-month high as drought grips Argentina

They are net short in soybeans. “Short-term upside (for corn) appears to be constrained,” Rabobank analysts said in a note.

“With the market having now digested the US revisions … crop conditions in South America will shape sentiment.”

Weekend showers in Argentina should improve crop conditions there but forecasters say drought could reassert itself in the coming weeks.

The Rosario exchange cut its production forecasts for Argentina this week and farm groups asked the government for tax cuts, calling their situation “critical”.

If the corn market is tightening, soybeans remain plentiful, with consultants Agroconsult the latest to predict Brazil will harvest well over 170 million tons of soybeans this season, the most on record.