U.S. corn futures edged higher on Friday, consolidating after a volatile week in which prices retreated from a 7-1/2 year high as a higher than expected U.S. supply forecast tempered support from recent Chinese demand.
Soybeans were also firm, with expectations for bumper South American production set against tight U.S. stocks, while wheat was little changed.
A week-long holiday in China for the Lunar New Year was also removing some
impetus from grain markets.
The most active corn futures on the Chicago Board of Trade (CBOT) were
up 0.5% at $5.43-3/4 a bushel by 1317 GMT.
After reaching their highest since June 2013 early this week, corn futures tumbled when the U.S. Department of Agriculture made a smaller than anticipated cut to its monthly U.S. corn stocks forecast before prices regained some ground from Thursday.
The USDA's stocks projection surprised traders who had expected recent massive export sales to China to absorb more of the U.S. surplus.
"Consolidation perhaps suggests the looser longs have been shaken out for now," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
"U.S. export sales were solid over the past week but not startlingly so," he said, referring to weekly export data published on Thursday.
Despite early rain delays to Brazil's soybean harvest, prospects for large soybean and corn crops in South America also curbed grain markets this week.
Soybean production in Brazil is expected to reach a record 133.817 million tonnes in 2020/21, while corn output is forecast to be bigger than previously projected, agricultural statistics agency Conab said on Thursday.
Harvest prospects in Argentina have also been boosted by rainfall after drought.
However, soybean futures remained underpinned by the USDA's monthly forecast of U.S. 2020/21 soybean stocks, which was below market consensus. CBOT soybean futures were up 0.4% at $13.72-1/4 a bushel while wheat edged up by a quarter of a cent to $6.33-3/4 a bushel.
The wheat market was monitoring the risk of frost damage to U.S. wheat crops this week in areas lacking protective snow cover.