CANBERRA: Chicago soybean futures dipped on Tuesday after large US bean sales to China and fears that hot and dry conditions in top producer Brazil may be damaging crops pushed prices to their highest since August in the previous session.

Corn also fell, while wheat futures rose. The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.3% at $13.78-1/4 a bushel by 0445 GMT after rising to $13.86 on Monday, the highest since Aug. 31.

Rainfall and soil moisture are not improving in central Brazil, where the bulk of the country’s soy is grown, said Vitor Pistoia, an analyst at Rabobank in Sydney. “The situation is not looking good for the soybean harvest,” he said.

Consultants AgRural lowered their forecast for Brazil’s 2023/24 soybean crop by 1.1 million metric tons to 163.5 million and said further downgrades were possible before the end of this month. The northern two-thirds of Brazil - including top grain producing state Mato Grosso - are forecast to see temperatures near 100 degrees Fahrenheit (38 degrees C) in the coming days.

The Brazilian soy harvest is due to begin around year-end. Meanwhile, US exporters sold 204,000 tonnes of soybeans to China for 2023/2024 delivery, the US Department of Agriculture said - the latest in a string of sales ahead of a meeting between Joe Biden and Xi Jinping in San Francisco on Wednesday.

Higher demand for US beans has helped push Chicago prices up 10% from a 22-month low in October. CBOT December soymeal futures have also surged, hitting a contract high on Monday.

Analysts estimate that the US soybean harvest is 96% complete. In other crops, CBOT corn slipped 0.3% to $4.75-3/4 a bushel and wheat rose 0.2% to $5.80-1/4 a bushel.

The USDA said US exporters had sold 143,637 metric tons of corn to Mexico for 2023/2024 delivery, helping lift prices from Monday’s three-year low of $4.61 a bushel.

Record-breaking US and Brazilian harvests have boosted corn supply, pressuring prices. Moving to wheat, the USDA is expected to show steady US winter wheat condition ratings, with the crop off to its best start in four years, according to analysts polled by Reuters. Russian export prices rose for a second week, with 12.5% protein Russian wheat for free-on-board delivery in late December increasing to $230 a metric ton last week from $226, the IKAR agriculture consultancy said.

Wheat remains near September’s three-year low of $5.40 a bushel, thanks to a deluge of cheap wheat from Russia, which has seen a second consecutive bumper harvest.