Soybeans slide 2% as rains temper US drought rally

Soybeans tumbled more than 2 percent today for their biggest decline in 11 days after widespread weekend showers in the US Midwest brought mild relief to the crop, but the market was still up 27 percent from the drought rally of the past two months.

Traders were also positioning themselves for this Friday's supply-demand report from the US Department of Agriculture that was widely expected to slash the government's estimates of this year's US corn and soybean crops.

There were expectations for the USDA's crop progress report to be issued after the market closed on Monday would show a marginal 1 percentage point decline in the condition ratings for corn and soybeans.

Condition ratings for both corn and soybeans are already at their lowest in 24 years. Just 24 percent of the corn crop and 29 percent of the soybeans are in good-to-excellent shape.

Corn futures were likewise lower at the Chicago Board of Trade, but analysts said much of the crop was well past the critical pollination stage of reproduction to benefit from the weekend rains, which were unlikely to help mitigate yield loss.

Meteorologist John Dee of Global Weather Monitoring said today the weekend rains ranging from 0.20 to 0.80 inch fell on more than 85 percent of the Midwest farm belt, and another similar system could bring more rain on Wednesday and Thursday.

The high heat that scorched the Midwest in July could also been moderating, with temperature highs later this week and early next week forecast in the 80s degrees Fahrenheit.

About two-third of the contiguous United States are in drought, the most extensive in 56 years, which has rallied corn futures more than 50 percent over the past two months. Chicago wheat futures have rallied nearly 34 percent.

CBOT November soybean fell 2.7 percent to $15.85 a bushel after climbing 1.7 percent last week. Spot August was down 2 percent at $16.20-1/4, off the record high $17.77-3/4 set on July 20.

December corn fell 1.3 percent to $7.97 a bushel, while spot-month September fell 1.5 percent to $7.99 a bushel, down from its all-time high of $8.28-3/4 set on July 20.