CHICAGO: US grain futures fell as much as 3 percent on Tuesday, with soybeans on track for their biggest single-day decline in two months on risk aversion tied to Europe's debt crisis and worries about the US economy.
Investors sought safe haven in the US dollar, which rose for a sixth straight day, pressuring dollar-denominated commodities including grains and oilseeds.
The dollar rose after Switzerland's central bank stunned markets by setting a cap on the soaring Swiss franc.
"The macro factors are dominating the agricultural markets again as the global economy remains on shaky ground," said Jaime-Nolan Miralles, commodity risk manager with INTL FC Stone.
At the Chicago Board of Trade as of 10:15 a.m. CDT (1515 GMT), November soybeans were down 29 cents at $14.16-3/4 per bushel.
December corn was down 12 cents at $7.48 a bushel and December wheat was down 21-1/2 cents at $7.54.
Soybeans slid about 2 percent after last week's rally to a near-three-year high on continuous price charts. Fears of disappointing US crop prospects drove that rally, and they underpinned prices on Tuesday.
Allendale Inc, an Illinois-based research and advisory firm, forecast the US corn crop at 12.466 billion bushels, with a yield of 147.7 bushels per acre, based on a survey of farmers in 24 states. It was the latest private estimate of US corn and soy production that has come in below the current forecasts from the US Department of Agriculture.
Allendale's figures were below USDA's August forecast for a corn crop totaling 12.9 billion bushels, with a yield of 153.0 bushels per acre.
Allendale forecast US soybean production at 3.007 billion bushels with a yield of 40.7 bushels per acre. The figures were below USDA's August estimates for soybean production at 3.056 billion bushels with a yield of 41.4 bushels per acre.
Traders were waiting for private analysts Informa Economics to release US crop estimates on Tuesday.
USDA was scheduled to release updated crop estimates on Sept. 12.
A forecast for a record output in Brazil weighed on soybean prices. Brazilian grains analysts Celeres said on Monday it expects the country's 2011/2012 soy crop to reach a record high 75.2 million tonnes, the same forecast as in August.
Copyright Reuters, 2011
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