U.S. corn futures eased on Tuesday, led lower by weakness in the cash market and an ample supply cushion, traders said.
Wheat firmed, buoyed for the second day in a row by the U.S. government's surprise cut to its domestic ending stocks estimate while soybeans rose on good export prospects.
Chicago Board of Trade corn futures hit a one-week low and briefly dropped below its 100-day moving average in early morning trading before a wave of bargain buying pulled prices off lows.
Corn prices have fallen for two days in a row, with the market shrugging off the U.S. Agriculture Department's bigger-than-expected cut to end stocks and focusing on the huge boost to supplies compared to a year ago.
"Corn sold off on the premise that the market failed to react to a set of friendly numbers yesterday," said Greg Grow, director of agribusiness at brokerage Archer Financial Services. "It kind of illustrates that the recent rally - 40 cents off of the lows -- already accounted for the bullish export numbers."
At 10:32 a.m. CST (1632 GMT), CBOT March corn <CH4> was 3 cents lower at $4.40 a bushel.
Some recent farmer selling has boosted supplies for processors and ethanol producers, causing cash bids to weaken.
"Corn export forecast is also well above expectations but the market hasn't done much as we still have a comfortable U.S. balance sheet," said Brett Cooper, senior manager for markets at FCStone Australia.
Strong export demand pushed soybean prices into positive territory after a weak opening. Soy bids firmed on the CIF market on Tuesday morning as icy conditions along Midwest rivers limited near-term supplies available to exporters.
Additionally, USDA said that private exporters reported the sale of 116,000 tonnes of U.S. soybeans to China for delivery during the 2014/15 marketing year.
CBOT soybeans for March delivery were 6 cents higher at $13.31-1/2 a bushel.
A growing global soybean supply base kept a lid on the gains.
Conab, Brazil's government crop supply agency, cut its forecast for the first time in the 2013/14 crop year but said the country's harvest would still be a record 90.01 million tonnes on Tuesday. It said that the hot, dry weather that has hit the country for the past month and a half had not yet impacted the forecast but sustained drought could affect its March estimate.
CBOT March soft red winter wheat was up 1-3/4 cents at $5.86-1/2 a bushel. Prices have risen 1.5 percent during the past two days but the market was facing some technical resistance at its 40-day moving average.
Australia, the world's second-largest exporter, raised its forecast for 2013/14 wheat output by 3 percent, as strong production in Western Australia state pushed the crop above 27 million tonnes for only the third time.
Source: Reuters
