Soybean futures fell 1 per cent Monday on forecasts for improving crop weather in South America as well as some follow-through selling from declines last week, traders said.
Corn also fell, pressured by the drop in soybeans, while wheat was up slightly, but well below its daily highs due to a round of profit taking. Concerns about tightening global supplies due to adverse weather conditions in key growing areas supported wheat.
Expectations for a boost to official estimates of the U.S. harvest when the U.S. Agriculture Department releases its monthly supply and demand forecast on Friday added to the bearish tone overhanging soy prices.
At 12:15 p.m. CST CBOT January soybeans were 15-1/2 cents lower at $15.11-1/4 a bushel. The front-month November contract, which is more thinly traded than January futures, hit a 2-1/2 week low of $15.09 early in Monday's session.
CBOT December corn was 5-1/4 cents lower at $7.34-1/4 a bushel. CBOT December wheat futures were up 3/4 cent at $8.65-1/4 a bushel.
The benchmark December wheat contract found support near its 100-day moving average. Prices briefly dipped below that key technical level, which the contract has not closed below since June 18, early in Monday's session.
Wheat fell 4.2 per cent in October, its biggest monthly decline since November 2011, which has sparked some bargain buying on dips in recent days.
Choppy, range-bound trade in all three commodities was expected in advance of the USDA's crop report. Traders also were reluctant to stake out new positions ahead of the U.S. presidential election on Tuesday, analysts said.
"I think everybody is a little bit uncertain with the election," said Jason Britt, analyst with Central States Commodities. "It is crazy how many people who I have talked to today that say, 'Well, I will probably keep my hands in my pockets.'"
Volumes were light, leaving prices susceptible to quick changes.
USDA report in focus
The government's upcoming forecasts for the corn crop were expected to stabilize after falling sharply during the past four months due to the severe drought that withered crops around the U.S. Midwest during the summer.
The drought sent corn prices to a record $8.43-3/4 per bushel in early August. Prices have fallen more than 12 per cent since that time as harvest reports have topped the lowered expectations.
The USDA's October report pegged the U.S. corn crop at
10.706 billion bushels, the smallest in six years. USDA's estimates for the crop have fallen in its last four reports after the government forecast at 14.790 billion bushel harvest in May and June.
USDA's latest soybean production estimate was 2.860 billion bushels, up from its September outlook but still well below the forecast for 3.430 billion bushels that the government gave in June.
Improving weather is seen for key South American corn and soybean areas over the next week to 10 days, Dee said. "Overall it's a pretty good picture for Argentina and Brazil," he said.
Areas that have been excessively wet in Argentina and southern Brazil are expected to begin drying down and the dry areas in most of northern Brazil are beginning to receive timely rains, said John Dee, meteorologist for Global Weather Monitoring.
"All-in-all it's a pretty encouraging forecast for South American growing regions but not perfect," he said.
Dry weather remains an issue in the U.S. Plains hard red winter wheat region, Dee said. "The bottom line is there is not much precipitation seen for western Kansas, Oklahoma or Texas."
More rains are forecast for Australia, the world's second-largest exporter, which could further slow the harvest.
"The supply outlook is continuing to deteriorate for Australia. Importers are looking more to Europe and the U.S.," Erin FitzPatrick, an analyst at Rabobank, said.
Mark Weinraub reports for Reuters in Chicago