U.S. soybean futures sank on Friday as traders took profits following a surge in prices the previous day, while corn futures sagged from a larger-than-expected U.S. harvest outlook.
Wheat futures also traded lower.
The decline in soybeans was an about-face from Thursday, when the new-crop November contract climbed 2.8 per cent after a monthly U.S. Department of Agriculture crop report projected soy stocks at 150 million bushels, down from an August estimate of 220 million. Traders, on average, expected 165 million.
The lower-than-expected forecast for stocks at the end of the crop year on Aug. 31, 2014 rattled traders because it was only up 25 million bushels from a nine-year low last year.
"A little profit taking ahead of the weekend after the big run-up yesterday would not be out of line," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Chicago Board of Trade November soybeans slid 14-1/2 cents, or one per cent, to $13.81-1/2 a bushel after peaking at $14, the highest price for the contract since early last week.
It will be difficult for soybean futures to fall too much because of lingering nervousness about low supplies, traders said.
The National Oilseed Processors Association's monthly soybean crush data next week should show the U.S. crush for August at 110.7 million bushels, down 4.9 per cent from July and the smallest since September 2011, a Reuters poll of nine analysts showed.
Old-crop U.S. soybeans were in short supply in August because of strong demand earlier in the marketing year.
The size of the upcoming harvest, which is needed to replenish inventories, is uncertain following a stretch of hot, dry weather in August, the critical growth period for the U.S. soy crop. The United States is the world's top producer and exporter of the oilseed.
Cool temperatures and rain will hit key growing areas in the western U.S. Midwest this weekend but will arrive too late to benefit most of the soon-to-be harvested crops, according to MDA Weather Services.
Harvest pressures prices
Farmers in the southern U.S. have already started harvesting corn, putting pressure on prices.
December corn slid 7-1/4 cents, or 1.6 per cent, to $4.59 a bushel at the CBOT. December wheat tumbled 11-1/2 cents, or 1.8 per cent, to $6.41-1/2.
"Harvest pressure is increasing on a daily basis as more and more producers are opening up fields and uncovering high yield potential for corn," said Brian Hoops, president of Midwest Market Solutions.
USDA, in the crop report on Thursday, raised its U.S. corn production estimate 0.6 per cent to a record 13.843 billion bushels, topping analyst estimates by nearly two per cent. The increase was a surprise following last month's stressful weather conditions.
"Corn is a drag on everything," said Dan Cekander of Newedge USA. "I think the fear will be that the corn yield gets bigger."
Traders are waiting for USDA's Farm Service Agency to release updated data on Tuesday that shows the number of acres that farmers were unable to plant last spring. The data is expected to provide further clues about the size of the harvests.
-- Tom Polansek reports on the ag sector and futures markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Nigel Hunt in London and Naveen Thukral in Singapore.