Corn holds near record high; wheat gains

US corn futures edged lower in early Asian hours after hitting a new record high on Monday, although tight supplies and strong demand are likely to keep losses in check as investors target $US8 a bushel.

Chicago Board of Trade corn for May delivery slipped less than a cent to $US7.7525 a bushel by 0923 AEDT. The contract hit a lifetime high of $US7.8375 on Monday.

CBOT corn has been hitting a series of record peaks after the US government released a report on March 31 that showed corn stocks at the world's largest exporter at critically low levels as of March 1.

With US stocks at their tightest since the 1930s and demand from the livestock and ethanol users and importers strong, traders say corn may soon hit $US8 a bushel, with some saying the grain could peak at $U9 this year.

US farmers have planted three per cent of intended corn acreage so far this year, matching their pace in 2010 and the average of the last five years but falling below analysts' expectations, the US Agriculture Department said on Monday.

Record corn prices and tight global stocks prompted farmers in southern stretches of the US Corn Belt to start their planting a little bit early as many hope to boost their total corn acreage this year.

But wet conditions prevented most farmers in key corn-producing states such as Illinois and Indiana from getting an early start on their planting.

Reform of biofuel subsidies that cost $US6 billion a year could hitch-hike its way to enactment on a must-pass spending bill, leaders of two ethanol trade groups said on Monday.

The 45-cent-a-gallon ethanol tax credit, as well as a tariff on imported ethanol, and a $US1-a-gallon credit for biodiesel expire on December 31 unless Congress intervenes.

Lawmakers allowed a one-year extension last December.

Chicago soybeans for May delivery eased 1.5 cents to $US13.67 per bushel, adding to a nearly two per cent fall on Monday as South America harvests a bumper crop and concerns grew that top importer China may slow its soy buying.

May wheat rose 4.25 cents to $US8.025 a bushel, after modest gains overnight on forecasts for showers in drought-plagued areas of the US Plains that could enhance development of the struggling hard red winter wheat crop grown in that region.

(Source: http://www.businessspectator.com.au/bs.nsf/Article/GRAINS-Corn-keeps-near-record-high-wheat-gains-FTW3J?opendocument&src=rss)