Soybean prices ended higher on Tuesday, after hitting a record high of nearly $18 per bushel as investment funds bought futures after the worst U.S. drought in 56 years devastated crops.
Spot soybeans hit an all-time high of $17.94-3/4 per bushel, piercing the high of $17.80-3/4 hit last week (all figures US$).
Soymeal, the main protein supplement used in livestock and chicken feed, also hit a record $554.40 per ton, above the previous high of $554.20 set on July 31.
Soy ended came off the record high by more than 1.5 per cent but still ended higher.
"I think early on, prices were up on buying from some potential stimulus coming from Jackson Hole but there was no follow-through," said Mike Zuzolo of Global Commodity Analytics.
U.S. Federal Reserve chairman Ben Bernanke, at the annual Fed monetary policy symposium in Jackson Hole, Wyoming last week, did not make any moves to boost the economy. But he hinted that measures might be taken to provide stimulus.
Most traders and analysts said the firm tone in soy and corn on Tuesday was early-month speculative buying from commodity funds rather than due to any change in fundamental input.
"It really was just some fund money that came in after the holiday and at the first of the month," Zuzolo said.
The market drew support from strong demand from China, the world's top buyer of soybeans, and signs of diminished supplies in Brazil, the world's No. 2 exporter of the oilseed after the United States.
Wheat was firm early, but turned lower on profit-taking, technical selling and improved prospects for U.S. winter wheat seedings after drought-relieving rainfall in the Midwest and in the U.S. Plains.
"Wheat was up early too but there was no follow-through and it's getting wetter in Kansas," Zuzolo said.
A positive remnant of Hurricane Isaac that slammed into the U.S. Gulf Coast last week has been significant rainfall in the U.S. winter wheat growing area ahead of autumn seeding of the 2013 crop.
Corn held firm but was below the session highs. Corn prices have been supported by persistent reports of very low yields in the drought-stricken early harvest of the U.S. Midwest crop.
Spot soybeans have jumped 33 per cent in just two months and spot corn is up nearly 50 per cent since early June. Corn hit a record in late August of nearly $8.50 per bushel.
Soybean ending stocks are forecast by the U.S. government to fall next summer to the lowest in almost a decade.
"We're stuck with tight stocks and voracious Chinese demand and we're seeing some technical buying," said Sterling Smith, market specialist for Citigroup.
Some analysts are expecting soybean stocks to fall to a 32-year low in data to be released next week by the U.S. Department of Agriculture in its September supply/demand report.
"The ongoing story of Brazil's supplies being depleted are supportive to soybean prices too," Smith said.
Brazil, Argentina and the U.S. account for nearly all of the world's soybean exports.
"We are still pricing in tight soybean supplies going forward," said Victor Thianpiriya, agricultural commodity strategist at ANZ in Singapore.
"Exports from Brazil have dropped sharply which goes to show that they are running out of beans and it means a lot more demand for U.S. beans."
Brazilian exports of soy tumbled in August after surging the previous month, data from the trade ministry showed on Monday.
Chicago Board of Trade (CBOT) September soybeans were up 6-1/2 cents at $17.71, new-crop November was up 11-3/4 at $17.68-1/4, December corn was up 5-1/4 at $8.05 and December wheat was down 3/4 cent per bushel at $8.88-3/4.
The wheat market was underpinned by strong global demand with Egypt, the world's biggest importer, buying 355,000 tonnes of Russian, Ukrainian and Romanian wheat over the weekend.
Black Sea wheat has been sought after over the past few weeks, boosting expectations that Russia will curb exports amid dwindling domestic supplies, although the government denied on Friday it was planning to limit sales.
-- Sam Nelson writes for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.