US soybean and corn futures edged lower on Tuesday as forecasts of much-needed rains in the key growing Midwest region weighed on the markets. Wheat continued to slide on rising world supplies of the grain. "The affirmative weather for crops and the strength in US dollar are putting pressure on the investors not to be in the agriculture markets," said Nicholas Chung, senior manager of the commodities team at Korea Development Bank in Seoul.
"It will stop some investments or make them less aggressive." By 0200 GMT, Chicago Board of Trade September corn contract fell 0.34 percent. The front-month contract dropped in the previous session. September soybean futures were down 0.02 percent to $13.39 per bushel. Soy rose in Chicago trade in the previous session on worries that dry conditions across the Midwest would reduce crop yields.
But Global Forecast System (GFS) computer model on Monday turned wetter for late next week, projecting heavy rains of one to three inches for parts of the Midwest. August is critical to the development of the US soybean crop, while July weather influences the corn yield. Topsoil moisture has evaporated due to limited rains since late July, especially east of the Mississippi River.
So far, the US Agriculture Department is estimating that American farmers will harvest their second-largest corn crop in history, 12.3 billion bushels. USDA projects soy output at 2.97 billion bushels, which would be the fourth-largest on record.
The strengthening dollar, which makes US exports less competitive, extended gains against the euro on Monday, with European data releases later in the day being eyed for further evidence of declining economic growth in the euro zone. Chicago September wheat was down 0.89 percent, after settling lower on improved global crop outlooks in the previous session.