CHICAGO, Aug 6 (Reuters): US soybean futures fell on Tuesday as expectations for a bumper U.S. harvest rose on overnight rains across a broad stretch of the Midwest and a government report showing the crop in better shape than expected, traders said.
The storms, which eased lingering concerns about dry weather during the past few weeks reducing harvest yields, also weighed on corn futures.
Wheat futures rose for the fifth day in a row on bargain buying and improving export demand. Prices for the front-month contract hit their highest since July 18.
The market remained focused on production, with the rain bolstering expectations that huge harvests of both corn and soybeans will replenish depleted supplies at elevators and processors around the country.
"Good rains were seen overnight across a large portion of the Midwest, which did serve to relive some of the weather worries that were lending support to the market," Sterling Smith, futures specialist at Citi, said in a note to clients. Chicago Board of Trade soybeans for August delivery fell 9-3/4 cents to $12.22-3/4 a bushel. The new-crop November contract, which tracks the crop that will be harvested in the coming weeks, posted the biggest decline, shedding 1.3 percent, or 13-3/4 cents, to $10.65-3/4.
The US Agriculture Department said on Monday afternoon that the soybean crop was rated 71 percent good to excellent, unchanged from a week ago and 1 percentage point above the average of analysts' forecasts.
"I think we are seeing the market react to the USDA's crop condition report, which was higher than expected," said Andrew Woodhouse, grains analyst at Advance Trading Australasia. Some private production forecasts added to the bearish tone hanging over the market.
INTL FCStone projected the U.S. 2014 soybean harvest at 3.865 billion bushels, with an average yield of 46.0 bushels per acre, and Farm Futures Magazine estimated the crop at 3.857 billion bushels, with an average yield of 46.07 bushels per acre.
