Soy at 4-month low as S. America crop forecasts keep rising

PARIS/SYDNEY: US soybean prices eased on Friday to hit a four-month low as expectations for South American production continued to rise, leading investors to ignore healthy weekly US exports.

Corn edged lower as the feed grain also faced pressure from the prospect of bumper South American crops in the coming months maintaining high global supply.

Wheat rose slightly, consolidating after touching six-week lows this week as weather forecasts called for rain relief in the dry US Plains wheat belt, reducing one of the few major production risks in a world wheat market set for record stocks this season.

Investors were also awaiting to see if US Republicans would manage to pass a healthcare bill seen as a test of President Donald Trump's ability to deliver reforms.

The most active soybean futures contract on the Chicago Board Of Trade fell 0.6 percent to $9.85-1/4 a bushel. It earlier slipped to $9.83-1/2, its lowest since Nov. 18.

The Buenos Aires Grains Exchange on Thursday raised its outlook for Argentina's 2016/17 soy crop to 56.5 million tonnes from 54.8 million previously, the latest of a series of upgrades to forecasts for harvests in South America.

The prospect of huge South American soybean crops arriving on export markets took the shine of higher than expected weekly US export sales reported on Thursday.

"Investors are thinking: how much longer can that last? Big South American crops are now arriving onto the market," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Global supply prospects for soybeans are expected to be boosted further by a sharp rise in the US area, with investors awaiting a government planting report next Friday for a clearer indication.

The most active corn futures contract dropped 0.1 percent to $3.56-1/4 a bushel, equalling a seven-week low touched on Thursday.

As in soybeans, favourable crop conditions in South America took attention away from stronger than anticipated weekly US exports this week.

The most active wheat futures contract rose 0.6 percent to $4.23-1/2 a bushel, in a slight recovery from Thursday's six-week low of $4.20 a bushel.

Rain forecasts pointed to significant moisture relief next week in six to 10 days ahead for all but the far southwest of the US Plains, Commodity Weather Group said in a daily update.

European Union common wheat production should rise 7 percent this year, with France on course to see a rebound from last year's poor crop, grain lobby Coceral said on Friday.

In France, 91 percent of soft wheat crops were in good or excellent condition as of Monday, farm agency FranceAgriMer said.