U.S. soybean futures fell nearly 2 percent on Monday, the biggest daily slide in two weeks, on long liquidation tied to improving weather outlooks in top producer Brazil and concerns about Hurricane Sandy's impact on the U.S. financial sector.
Wheat and corn traded both sides of unchanged as the sell-off in soybeans offset support from worrisome weather for wheat in the southern U.S. Plains, Australia and elsewhere.
Soybeans posted the biggest moves at the Chicago Board of Trade, falling for a third straight session as forecasts called for improved soybean planting weather in Brazil. The global grain trade is counting on Brazil and Argentina to produce a bumper soy crop in early 2013 after drought clipped the 2012 U.S. harvest as well as the previous South American crop.
"Center west and northern Brazil looks better in the six- to 10-day forecast than what it has looked in weeks," said Mike Zuzolo, president of Global Commodity Analytics in Lafeyette, Indiana.
Hurricane Sandy, barreling toward the U.S. East Coast, also appeared to prompt funds to shed a portion of their net long position in soybeans, Zuzolo said. The storm, which could become the largest storm ever to hit the United States, shut trading on Wall Street Monday and closed U.S. government offices.
"This storm coming on more aggressively than the trade was prepared for, meaning that the ability of the banks and exchanges to re-open within one to two days is now probably being questioned by a lot of the New York traders," Zuzolo said.
"I am picking up word that maybe the funds in New York are limiting and reducing their risk because of this hurricane, and that was probably the exposure on the long bean side," he added.
The weekly U.S. crop progress report, normally released on Monday afternoons, will be delayed as the federal government closes down ahead of Sandy, the U.S. Department of Agriculture said, adding that the rescheduled release time would be announced as soon as offices reopen.
Sandy is unlikely to have a direct impact on U.S. crops although it may disrupt the transport of grain, analysts said.
At the CBOT as of 10:18 a.m. CDT (1518 GMT), most-active January soybeans were down 27-3/4 cents, or 1.8 percent, at $15.33-1/2 per bushel. December wheat was up 1 cent at $8.64-3/4 a bushel and December corn was up 1-1/4 cents at $7.39 a bushel. WORRISOME WHEAT WEATHER
Wheat posted modest gains on concerns that unfavorable weather in several key wheat-exporting countries could limit global production.
"People are looking around and seeing a lot of things to worry about in terms of wheat weather - Argentina, Australia, the (U.S.) hard red winter wheat belt - that type of thing," said Jerrod Kitt with the Linn Group in Chicago, noting that dry weather is forecast for the U.S. Plains hard red winter wheat region.
CBOT December wheat pared losses and traded higher at times after finding support at $8.60, matching last week's low. Traders said corn was seeking direction from wheat, although technical buying also underpinned the corn market.
CBOT December corn corn rebounded after matching its mid-October low of $7.32-1/2, while traders were also watching to see whether the contract could stay above its 100-day moving average near $7.37. December corn has not closed below its 100-day average since mid-June.
In a reminder of weak export demand for U.S. corn, private Egyptian interests have in past days purchased about 180,000 tonnes of corn from South America, European traders said Monday. It was thought largely to have been bought from Argentina, traders said.