SINGAPORE: US soybeans slid from a three-month top on Tuesday, snapping five seesions of gains, while wheat fell around half a percent, pressured by a stronger dollar and Greek resistance to strict conditions attached to a bailout.
Corn fell 0.5 percent as investors squared positions ahead of Thursday's US Department of Agriculture report on global demand and supply of agricultural products.
Chicago Board of Trade March soy fell 0.4 percent to $12.27-3/4 a bushel by 0417 GMT, after touching $12.44 in the previous session, its highest since late October on a continuation chart.
March wheat lost 0.4 percent to $6.66 a bushel, after gaining almost 10 percent over the last three weeks. Corn for March delivery fell 0.5 percent to $6.41 a bushel.
On the fundamental front, concerns about cold weather in the key wheat-growing areas of the Black Sea region and Europe are providing support to the wheat market.
For soybeans, dryness in soy-growing parts of South America is threatening to curb yields, giving opportunity to US suppliers to boost exports to China, the world's top buyer.
"I think you are going to see a little bit of position squaring before the USDA report," said Brett Cooper, senior manager of markets at FCStone Australia.
"There has been rain in parts of South America but people are certainly concerned about the yields ... Is it too late to add yields to the Brazilian crop? That's the big question," he said.
Markets edged down as Greek resistance to the strict conditions attached to a bailout fund sapped recent momentum spurred by hopes the global economy is improving, and the euro eased on renewed fears of a messy debt default.
After resisting terms of a proposed new bailout deal which demands strict labour reforms and other austerity steps, Greek political leaders face crunch talks on Tuesday to clinch an agreement needed to avoid a debt default.
The dollar index, which measures the strength of the greenback against a basket of currencies, rose 0.2 percent, making dollar-priced US commodities expensive for overseas buyers.
In addition to the harsh weather, expectations that Russia will curb grain exports drove wheat futures to a 4-1/2 month high last week. But Russia has said it saw no need for grain export restrictions in April and raised its grain export forecast for 2011/12 by 12.5 percent.
"Large funds are short on Chicago wheat and most buyers have been hand-to-mouth on wheat, so the rally last week has generated quite a bit of interest," Cooper said.
Regulatory data showed late on Friday that large speculators cut their net short position in CBOT wheat from a record level by covering shorts and buying some long contracts.
Analysts in Reuters poll expect upcoming US Agriculture Department report to show domestic ending stocks of wheat for the 2011/12 crop year at 867 million bushels, down slightly from the government's January estimate of 870 million bushels.
World ending stocks of wheat were forecast to come in at 208.963 million tonnes, compared to 210.020 million in the January report.
In the soybean and corn market, traders are expecting the US Department of Agriculture to show lower estimate for South American production.
Argentina's 2011/12 soy harvest will be at least 47 million tonnes, a government source said on Monday, while a Reuters poll showed analysts expecting production of 45 million to 50 million tonnes.
Brazil's projected 2011/12 soybean crop - the world's second biggest - is also shrinking, and grain analyst Celeres trimmed its estimate on Monday to 72.04 million tonnes from 74.4 million tonnes in early January.
Rains have been forecast this week in key growing regions of Argentina but dry weather over the past month was likely to reduce yields in the No. 3 world soy exporter.
As a result, China is likely to buy more US soybeans this quarter with a withering drought expected to cut the South American harvest.
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