Chicago corn futures eased on Thursday after gaining overnight, recouping some of the previous session's losses, with concerns over dry U.S. weather and strong demand underpinning prices.
World edible oil prices jumped on supply concerns with soybean oil hitting its highest in a decade, while soybeans climbed for a third consecutive session.
"The situation in South America has been a concern effect, and now U.S. Midwest is turning dry. It might be a bit early to lower production estimates for U.S. corn crop," said Phin Ziebell, agribusiness economist at National Australia Bank.
"The edible oil side is more bullish with higher use in biofuels. Energy prices are also climbing."
The most-active corn contract on the Chicago Board of Trade (CBOT) was 4 cents lower at $6.71 a bushel, as of 9:23 a.m. (1423 GMT), after dropping 2% on Wednesday.
"The weather forecast calls for dry and hot weather for the next two weeks, which will limit the downside potential for this product (corn)," French consultancy Agritel said on Thursday.
The most-active soybean oil futures contract was down 0.79 cent at 69.59 cents per lb., after hitting 72.13 cents, its highest since 2011. Soybeans rose 1-1/4 cents to $15.63-3/4 a bushel.
Wheat eased 8-1/4 cents to $6.79-1/4 a bushel.
Concerns Over Yields
Hot and dry weather in parts of the U.S. Midwest is causing concerns over yields of newly planted corn and soybean crops, following a severe drought in Brazil.
Brazil's worst water crisis in almost a century will hurt river navigation and make transportation of goods more expensive in the world's largest exporter of commodities ranging from soybeans to coffee and sugar.
Malaysian palm oil futures jumped 3% while China's Dalian palm oil prices gained more than 5%.
In Russia, Deputy Prime Minister Victoria Abramchenko told Reuters that country's new formula-based grain export taxes would remain in place as long as there is increased global demand for food.
Commodity funds were net sellers of CBOT corn, wheat and soymeal futures contracts on Wednesday and net buyers of soybeans and soyoil, traders said.
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