U.S. soybeans fell two per cent on Monday for the second straight session as forecasts for more rain this week eased concerns about declining U.S. harvest prospects and offset a tighter-than-expected supply outlook from the government.
Corn slipped on reports of big yields from the early U.S. harvest, adding to a sharp drop since last Thursday's surprise increase in the U.S. Department of Agriculture's production forecast. Wheat eased under pressure from big U.S. supplies.
U.S. weather models called for more rain later this week, with temperatures forecast to be lower, analysts said, easing stress on some late-planted soybeans that have endured intense heat and sparse rainfall in the past month.
But an expected 0.25 to 1.25 inches of rain across 60 per cent of the Crop Belt will arrive too late to help most soybean plantings, a meteorologist said.
"From a soil moisture standpoint, it will start to reverse some of those deficits," said meteorologist Joel Widenor of the Commodity Weather Group. "It's too bad it wasn't three or four weeks ago."
Some farmers are optimistic that the rains will help, said Mike Zuzolo, president of Global Commodity Analytics.
"Based upon producer comments today and at the end of last week, they see 20 to 25 per cent of their bean fields viable enough to be able to get help from this rain," he said. "A follow-up rain mid-week or later is going to be useful as well, as far as trying to build a bit more yield into the beans, and maybe bigger beans in the pods."
Funds also pressured soybeans by lightening their long positions in the oilseed and buying corn to unwind spread trades between the crops, said Sterling Smith, futures specialist at Citigroup.
"The soybean drop today is driven principally by funds getting out of the way," he said early in the session.
Technical selling also weakened soybeans, traders said.
USDA added to soybean supply concerns on Thursday by making a larger-than-expected cut to its estimate for 2013-14 ending stocks, casting doubt on the scope for supply to be replenished after last year's drought-hit harvest.
Soybeans rose nearly three per cent after the USDA estimates but have since given up those gains on profit-taking and more-favourable weather forecasts.
Chicago Board of Trade November soybeans lost 2.4 per cent, or 33-1/4 cents, at $13.48-1/4 a bushel (all figures US$).
The U.S. soybean crush declined five per cent last month to 110.502 million bushels, versus 116.338 million bushels in July, National Oilseed Processors Association data showed on Monday.
Analysts had forecast a monthly crush of 110.7 million bushels, according to a Reuters poll.
CBOT December corn slipped 0.5 per cent, or 2-1/2 cents, to $4.56-1/2 a bushel. It fell in the past two sessions after USDA surprised the market by raising its crop production forecast to a record high, despite unfavourable weather.
USDA on Tuesday will release data on how many acres farmers were unable to plant last spring, which could result in a reduction in planted acreage estimates for corn, Zuzolo said.
"I still think they are about 1 to 1.2 million, maybe even 1.4 million acres too high on either harvested or planted acreage (of corn), depending on how you look at it."
CBOT December wheat eased 1/4 cent to $6.41-1/4 a bushel.
Wheat has been curbed by weakness in corn but continues to enjoy a sizeable premium to its fellow grain because of generally brisk export demand so far this season.
-- Rod Nickel and Julie Ingwersen are Reuters correspondents in Winnipeg and Chicago respectively.