US soy eases from 7-week high, corn falls for 3rd day

SINGAPORE: US soybean prices eased slightly on Tuesday, losing steam after climbing to a seven-week peak on concerns over rains stalling harvesting in parts of Brazil and dryness threatening crops in Argentina.

Wheat recovered from a three-week trough as investors were tempted by the lower prices, while corn lost more ground on poor demand for US supplies.

"Given the strong gains we have had in beans, it is not surprising to see a bit of profit-taking," said Victor Thianpiriya, an agricultural strategist at ANZ in Singapore.

"We are very close to some technical resistance levels in beans and fund positioning has increased substantially over the past week."

Chicago Board of Trade March soybeans had dropped 0.2 percent to $14.85-1/4 a bushel by 0257 GMT, after climbing to their highest since mid-December on Monday.

Reuters analyst Wang Tao said he expected March soybeans to retrace to $14.69-1/2 per bushel, as they have failed to break a resistance zone of $14.98-1/2 to $15.01-1/4.

Still, the market will be underpinned by adverse crop weather in Brazil and Argentina, the world's second and third largest soybean exporters respectively.

Dry weather will resume this week in Argentina's main crop belt after limited showers fell on soy and corn plants over the weekend, a local weather specialist said on Monday.

Brazilian agricultural analysts AgRural and Celeres cut their forecasts for the country's soybean crop on Monday because of irregular rains in some growing areas.

AgRural lowered its December forecast by 1 million tonnes to 81.2 million tonnes. Celeres said the crop would likely yield 80.1 million tonnes, down from its January forecast of 80.84 million tonnes.

"The market is going to keep the premium until we get an idea on the crop size in South America," said Thianpiriya.

At the same time, demand from China, the world's top importer, continues to remain strong. The US Department of Agriculture confirmed on Monday private sales of 116,000 tonnes of US soybeans to China, with 58,000 tonnes for shipment in the marketing year ending Aug. 31.

Commodity funds sold a net 4,000 CBOT corn contracts on Monday, trade sources said. They sold 3,000 wheat and bought 5,000 soybean contracts.

CBOT March wheat gained 0.2 percent to $7.64-1/4 a bushel and March corn gave up 0.3 percent to $7.32 a bushel.

Wheat futures edged higher after coming under pressure from an improved weather outlook in the US Plains.

Crop-friendly moisture is expected to arrive in the drought-stricken US Plains and northwest Midwest later this week, an agricultural meteorologist said on Monday.

However, much more rainfall or snow cover would be needed to provide significant relief from the worst drought in the United States crop belt in more than 50 years, meteorologists and crop experts have said.

Corn extended losses on a lack of demand for US supplies. An estimated 5.348 million bushels of corn were inspected for export in the week ended Jan. 31, USDA said. That was below trade estimates for inspections of 15 million to 20 million bushels of corn.