CHICAGO: US corn fell 1 percent posting its biggest drop in five trading days and soy slipped a half percent on Monday as traders liquidated or sold some long holdings of each commodity before a US government grain report on Tuesday.
"It's choppy before tomorrow's supply and demand numbers. Everyone is expecting the government to cut the stocks but there always could be a surprise," said Brian Hoops, analyst for Midwest Market Solutions.
Wheat also eased in volatile dealings before the fresh data is released.
At 10:23 a.m. CDT (1523 GMT), CBOT May corn was down 8-3/4 cents per bushel at $6.49-1/2, May soy was down 8-1/4 at $14.21 and May wheat was down 1-1/2 cents at $6.37.
The USDA will update its monthly global crop production and US ending stocks forecast at 7:30 a.m. CDT (1230 GMT) on Tuesday.
US corn supplies are expected to fall to a fresh 16-year low before the fall harvest, said analysts polled by Reuters, signaling there will be razor-thin supplies this year that could stoke food inflation and hurt margins for food companies. of more demand for US soy in the export market.
"After the report, everyone will turn their attention to weather and corn plantings, I expect plantings at 8 to 10 percent this week but after this week they'll plant at record pace because the insurance safe dates will have been met," Hoops said.
If farmers plant too early they risk losing crop insurance benefits should a disaster strike their crops.
Farmers have been planting corn at the fastest pace ever in the US Midwestern grain belt this spring, leading to some concern the crop may be vulnerable to harm from cold weather.
A cold snap each morning most of this week is expected to remain in the northern portion of the US Midwest, posing a minor threat to the 2012 corn crop since only a small portion of it has been planted and very little has emerged, agricultural meteorologists said.
A Reuters poll of 14 analysts on Monday showed that US farmers had planted 8 percent of their intended corn acreage as of April 8, up from 3 percent a week ago and the most ever for early April.
Profit-taking also weighed on the soybean market since US soybean prices have been climbing to a 7-month high on a steady stream of lower South American crop forecasts and expectations for the US to capture the lion's share of soy export demand.
USDA also will release updated global crop production forecasts on Tuesday including an outlook for South American soy output following a drought that trimmed crop prospects.
Traders polled by Reuters expected the USDA to peg Brazil's soybean production at 67.114 million tonnes, down from 68.5 million in March. Argentine production was seen dropping to 45.193 million from 46.5 million.
Friday's weekly report from the US Commodity Futures Trading Commission (CFTC) confirmed a big buildup of long positions in the soybean and corn markets.
Large speculators increased their net long position on Chicago Board of Trade soybean futures and options for a ninth consecutive week, reaching another record high in the wake of a government report on plantings and stockpiles.
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