Chicago Board of Trade (CBOT) soybean futures eased on Tuesday after climbing to a two-month high in the previous session, with the market pressured by profit-taking and prospects for a big U.S. soybean harvest.
Corn also sagged from a four-week peak on Monday, weighed down by a ProFarmer tour of the Midwest crop belt that reported huge corn yield potential.
"Generally, really good crops in Ohio and Indiana from what we've found and what I've personally seen," said Brian Grete, a ProFarmer tour leader for the eastern Midwest. "But they (crops) are going to need moisture to hold onto the yield potential that's currently out there."
Grete was a guest of the Reuters Global Ag Forum during a midday tour stop on Tuesday. A similar crop scenario was being reported from the western leg of the tour.
Wheat also eased on spillover selling from the lower corn and soybean trend.
CBOT new-crop November soybeans closed down 12-3/4 cents at $12.90-1/2 per bushel, new-crop December corn was down 10 cents at $4.75-1/2, and September wheat was down 7-1/4 cents at $6.34-1/4.
Traders and analysts said corn and soybeans underwent a downward correction after Monday gains sparked by forecasts for dry weather in the U.S. Midwest that could trim yield potential. Some traders said the gains were overdone.
"Weather hasn't changed, if anything it's drier, but it was probably overdone yesterday," a trader said. "I think we'll see some buying and support on dips because of the dryness."
Warmer and drier weather over the next couple of weeks poses a threat to trim corn and soybean yields, an agricultural meteorologist said on Tuesday.
"There will be some increasing heat units for immature corn, which is good, but corn will be stressed, too," said Don Keeney, a meteorologist for MDA Weather Services.
The U.S. corn crop was planted late this year due to excessive wet weather during the spring planting season. The late seedings and cool summer have led to a corn crop that is more immature than normal. The immature crop needs warmth to boost growth, but it also needs moisture to help it fill kernels.
The U.S. Department of Agriculture (USDA) on Monday said 61 per cent of the U.S. corn crop was in good to excellent shape, down from an estimate of 64 per cent last week. It said 62 per cent of the soybean crop was good to excellent, down from 64 per cent last week.
Bumper crops expected
Analysts and crop experts maintain that the U.S. harvest will be a huge one, and this week's ProFarmer tour of the Midwest corn and soybean growing region is confirming prospects for a bumper crop.
"There was a little step-up in farmer selling during the rally, and I still think the corn crop is going to be huge, 14 billion-plus (bushels)," said Roy Huckabay, an analyst for Linn Group, a Chicago brokerage house.
The U.S. Department of Agriculture (USDA), in its August crop report, pegged 2013 U.S. corn production at a record 13.8 billion bushels, above the previous record output of 13.1 billion.
Huckabay cited the big corn yields being reported by the crop scouts in the ProFarmer tour. Crop scouts in Ohio, in the eastern Midwest, said that state was on track for a near-record yield.
Above-average yield prospects were reported in South Dakota, in the northwest corner of the Midwest. The South Dakota crop was lagging normal maturity, leaving it vulnerable to harm from an early frost.
Corn in southeast Nebraska has the potential for better-than-average yields, while corn and soybean fields in central and west-central Indiana are headed for above-average yields, crop scouts said.
-- Sam Nelson
is a Reuters correspondent covering grains and oilseeds futures markets in Chicago.