CHICAGO (November 07 2009): US soybeans slid nearly 3 percent on Thursday as clear skies promoted harvesting across the US heartland which pumped additional supplies into marketing channels. Corn futures were also weak but the biggest fall came in soybeans as farmers focused on harvesting beans, which are more prone to weather damage than corn.

"Weather is good into next week. There's active harvest and the yields are very good while exports are not good," said Paul Haugens, vice president for Newedge USA. Chicago Board of Trade soybeans for November delivery ended 28-1/2 cents a bushel lower, down 2.9 percent, at $9.67. December corn closed 7-1/2 cents, or 2 percent, weaker at $3.76-1/2.

US cash markets were weakening as well amid the influx of freshly harvested crops into grain terminals. The government has forecast an all-time high US soybean crop of 3.250 billion bushels this year. The corn crop is also expected to be a bin buster of 13.018 billion bushels - the second largest ever, trailing only the 2007 harvest of 13.038 billion.

The US Department of Agriculture will update its forecast next Tuesday, and analysts hold mixed opinions about whether the agency will raise or lower its estimates given the slow harvest. Despite the possibility of downward revisions, the numbers are expected to remain big. A week of warm, dry weather well into next week is what farmers needed after persistent rains during October. The change will also help crops dry down.

The dollar's bounce added to the bearish tone in grains. A firmer dollar boosts the price of US grain exports to overseas buyers and also prompts investors to sell. The weakness in corn and soybeans spilled over to wheat. Lackluster demand for pricey American wheat looms over the market. More reminders surfaced on Thursday when Egypt's main government wheat buyer passed on US wheat, buying 120,000 tonnes of French and Russian wheat in a snap tender.

USDA weekly export sales data issued early Thursday showed wheat sales below trade expectations while corn sales were above estimates and soybeans were in line with the trade. US soybean export shipments were huge, with the world's top soy buyer, China, taking more than 1 million tonnes.

Copyright Reuters, 2009