On the Chicago Mercantile Exchange, soybeans futures for November delivery traded at USD17.6225 a bushel, shedding 0.35%. The November contract fell by as much as 0.7% earlier in the session to hit a daily low of USD17.5588 a bushel.
Prices rallied to an all-time high of USD17.8888 a bushel on Tuesday.
Soy futures have gained sharply in recent weeks, as the same hot, dry weather that boosted corn buoyed soy futures as well. Soybeans are grown in many of the same regions across the U.S. as corn.
The U.S. Department of Agriculture’s weekly crop progress report released after Tuesday’s closing bell showed that 30% of the soybean crop was rated ‘good’ to ‘excellent’ as of September 2, unchanged from the previous week and significantly below the 56% recorded in the same week a year earlier.
U.S. soy crop conditions remain at the lowest levels since 1988 for this time of year.
Ongoing expectations that global demand for U.S. soybeans will remain strong in the near-term further supported the oilseed.
Global soybean supplies are already on the decline, as severe drought conditions earlier in the year in major South American growers Brazil and Argentina damaged crops in the region.
Meanwhile, corn futures for December delivery traded at USD7.9875 a bushel, slumping 0.7%. The December contract fell by as much as 0.75% earlier in the day to hit a session low of USD7.9812 a bushel.
Front-month prices touched an all-time high of USD8.4237 a bushel on August 10.
The USDA said last week that only 22% of the U.S. corn crop was rated in ‘good’ to excellent’ condition as of last week, unchanged from the previous week and below the 52% recorded in the same week a year earlier.
The share of the U.S. corn crop that was rated ‘poor’ to ‘very poor’ held steady at 52% last week.
The U.S. produced 38% of the world's corn last year, making it the both world's largest corn producing nation and the largest exporter of the grain.
Escalating concerns over the impact of the worst drought in at least 56 years in the U.S. Midwest and Great Plains-region have fuelled a furious rally in grain prices over the past two months.
Corn prices have surged nearly 55% during the period, while soy prices added 30%.
Elsewhere, wheat for December delivery traded at USD8.8350 a bushel, declining 0.6%. Earlier in the day, the December contract fell by as much as 0.85% to hit a session low of USD8.8112 a bushel.
Wheat prices were lower for the third consecutive day, as traders conintued to readjust positions after Russia said last week that it would not limit grain exports, disappointing market players who had been betting on a disruption to supplies from the country.
Russia’s Deputy Prime Minister Arkady Dvorkovich said last Friday the country will not limit grain exports even if its exportable surplus is exhausted.
Prices had rallied to a three-week high of USD9.1450 a bushel on August 30, amid growing fears the country will implement a limit on grain exports.
Russia is a major wheat exporter and competes with the U.S. for business on the global market. A disruption to exports from the country could boost demand for U.S. supplies, which is the world’s third largest wheat producer and biggest exporter.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
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