Soy dips from 3-month high as dry weather boosts LatAm harvest
U.S. soybeans lost ground on Tuesday, dropping from their highest since early December as the market came under pressure from forecasts of dry weather in South America which will boost a harvest that is expected to reap a near-record crop.
Corn slid from a three-week high while wheat fell from its highest since early February.
"Good South American harvest progress is expected for the next two weeks as much of Brazil and Argentina is forecast to see a drier bias evolve," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia in Sydney.
Brazil is in the middle of harvesting a massive soybean crop of about 100 million tonnes while Argentina is estimated to produce close to 58 million tonnes.
Chicago Board Of Trade most-active soybean contract fell 0.3 percent to $8.93-1/2 a bushel by 0335 GMT after earlier on Monday hitting an intra-day high of $8.97 a bushel, the highest since Dec. 7.
Corn lost 0.3 percent to $3.67-1/2 a bushel, having gained 1 percent in the previous session when prices hit $3.69-1/4 a bushel - the most since Feb. 22.
Wheat gave up 0.1 percent to $4.78-1/4 a bushel, having climbed to highest in more than five weeks at $4.79-1/2 a bushel on Monday.
The gain in agricultural products has largely been driven by short-covering by investors who held record net-short positions.
Strong U.S. exports added fuel to rallies in soybeans and corn in recent sessions.
Wheat drew support from concerns that dry weather in the U.S. Plains could damage crops that recently emerged from dormancy.
There was additional support for soybeans from a strengthening Brazil real, which make Brazilian soybeans more expensive on world markets and could boost competing U.S. export sales.
U.S. soybean processors likely slowed their crushing pace by 4.8 percent during February, due to weakening demand for soymeal from overseas buyers, analysts and traders said.
Analysts were expecting the National Oilseed Processors Association to report that its members crushed 139.942 million bushels of soybeans in February, based on the average of estimates given by six analysts.
Commodity funds bought an estimated net 10,000 CBOT corn contracts on Monday, trade sources said. The funds also were net buyers of 2,500 wheat contracts and were net even in soybeans, they said.