GRAINS-Corn edges down but hovers near 13-month high as drought grips Argentina

CANBERRA, Jan 16 (Reuters) - Chicago corn futures edged lower in early trading on Thursday but remained close to a 13-month high, after the U.S. government last week tightened its supply outlook, and hot and dry weather damages crops in Argentina.

Soybean futures also fell as the market geared up for record production from top producer Brazil. Wheat dipped amid lacklustre demand.

FUNDAMENTALS

* The most active corn contract on the Chicago Board of Trade (CBOT) Cv1 was down 0.2% at $4.77-3/4 a bushel at 0147 GMT, after reaching $4.80 on Tuesday and Wednesday, its highest level since December, 2023.

* CBOT soybeans Sv1 fell 0.6% to $10.37 a bushel and wheat Wv1 slipped 0.4% to $5.44-3/4 a bushel.

* The market is still digesting last week's U.S. Department of Agriculture reports lowering its estimates for 2024 U.S. corn and soybean production and ending stocks.

* Soybeans remain well supplied as Brazil begins what is expected to be a record harvest, but the corn supply outlook is tighter and hot and dry weather threatens production in Argentina, the world's third-biggest corn exporter.

* The Rosario grains exchange on Wednesday trimmed its 2024/25 Argentinian corn harvest forecast to 48 million metric tons from between 50 million tons and 51 million tons.

* Heavy rain forecast for Argentina at the weekend should bring some respite but dry conditions could return later this month, the Commodity Weather Group said in a client note.

* Commodity funds expanded their net long position in CBOT corn for a fifth consecutive day on Wednesday, traders said. Speculators hold net short positions in soybeans and wheat.

* Data on Wednesday showed that the monthly U.S. soybean crush jumped to its highest on record in December after several new processing plants came online.

* Ukraine will reduce areas sown to soybeans and rapeseed this year but will increase corn areas, Ukrainian farm business association UCAB said.

* The U.S. dollar has weakened a little this week but remains close to a 26-month high against a basket of currencies reached on Monday. The strength of the greenback makes U.S. crops less competitive on export markets. .DXY USD/

MARKETS NEWS

* A global equities gauge rallied on Wednesday while U.S. Treasury yields fell after data showed core U.S. inflation rose less than expected in December, raising hopes that the Federal Reserve could ease rates further. MKTS/GLOB

(Reporting by Peter Hobson; Editing by Rashmi Aich)

((peter.hobson@thomsonreuters.com;))