Chicago soybean futures lost more ground on Tuesday as rapidly progressing planting in the U.S. Midwest prompted investors to close out some long positions after a recent rally fueled by weather damage to Argentina's harvest.
Renewed strength in the dollar, which approached a two-month high on fresh expectations of an upcoming U.S. interest rate rise, and concerns over faltering growth in China also curbed soybean and cereal prices.
Corn edged lower as U.S. planting remained above the average pace of recent years, while wheat fell for a fifth session under pressure from ample supplies, despite concerns that rain could threaten maturing crops in the U.S. Plains.
Chicago Board of Trade's most-active soybean contract dropped 1.3 percent to $10.45-1/4 a bushel by 1133 GMT, having closed 1.5 percent lower on Monday.
"The soybean market is becoming nervous that investors, now holding the largest long position seen in almost two years, will be looking to take profits," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. "Weather forecasters continue to expect more rain on U.S. hard red winter wheat crops this week. The market will have some concerns about quality and yields."
In weekly estimates released after the market close on Monday, the U.S. Department of Agriculture said soybean planting was 56 percent complete as of Sunday, ahead of the five-year average of 52 percent and also beating an average trade estimate of 55 percent.
Prices on China's Dalian exchange suffered deeper losses, with soybeans falling almost 4.2 percent and soymeal sliding 4.7 percent. Soymeal futures have advanced in recent weeks on worries about the size and quality of Argentina's soybean harvest following April floods.
Argentina is the world's top exporter of soymeal, a livestock feed ingredient produced along with soyoil when soybeans are crushed.
U.S. soymeal futures were down 1.6 percent at $381.6 per short ton, as it continued to pull back from an 18-month high of $398.3 hit on Monday.
Corn fell 0.6 percent to $3.95-1/4 a bushel, giving up similar gains from Monday, and wheat slipped 0.7 percent to $4.59 a bushel.
The U.S. corn crop was 86 percent planted by Sunday, ahead of the five-year average of 85 percent but behind an average of analyst expectations for 88 percent.
Despite rain risks in the run-up to the U.S. winter wheat harvest and damp conditions in top European Union producer France, the international market remained well supplied.
"As of today it's hard to have a bullish outlook for cereal markets," said Francois Luguenot, head of market research at French-based InVivo Trading. "People will talk about harvest risks like a drought or crop disease but at the moment there's nothing that looks like removing a large chunk of production."