U.S. corn and soybean futures eased Wednesday after reports of some better-than-expected yield prospects encouraged profit-taking from early week highs that stemmed from the country's worst drought in 56 years.
Wheat snapped a five-session streak of increases with additional pressure from prospects for a big Canadian crop, while corn and soy exerted spillover pressure.
"The bean rally is taking a break with some profit-taking by the longs, and that's got the other markets down with them. The market is in a sit-and-hold mindset, backing and filling, profit-taking and awaiting more information," said Mike Zuzolo, president of Global Commodity Analytics.
U.S. corn and soybean prices hit record highs this summer as scorching temperatures and a relentless drought ravaged crops in the United States, while drought also raised fears Russia would restrict its massive wheat exports.
Chicago Board of Trade (CBOT) new-crop November soybeans fell 4-3/4 cents, or 0.3 per cent, to $17.27-3/4 a bushel after hitting a contract high of $17.34-1/4 on Tuesday (all figures US$).
December corn shed four cents, or 0.5 per cent, to $8.34-3/4 a bushel while December wheat slid five cents, or 0.5 per cent, to $9.17 a bushel.
The spotlight this week is on the Pro Farmer Midwest Crop Tour -- a group of experts taking a close look at the precise state of U.S. crops and giving immediate impressions. Tour results were mixed on Wednesday.
Corn and soybean fields in southwest Iowa are expected to produce about the same amount of crops as last year, according to field surveys, but in central Illinois, the No. 2 growing state of corn and soy, yields are likely to be much lower than average.
"After an avalanche of nothing but discussion of how bad these conditions are, numbers coming out are maybe mixed," Rich Nelson, chief strategist at Allendale Inc., said. "Maybe (there is) a change in mindset right now."
The big picture is still grim.
Analysts surveyed by Reuters expect the drought to drop the average U.S. corn yield to 121.5 bushels per acre, the lowest in 16 years, and corn production to 10.5 billion bushels, an eight-year low.
U.S. soybean yield was pegged at 36.6 bushels per acre, the lowest in eight years, and production is expected at 2.713 billion bushels, a four-year low.
Light showers late this week in the northern Midwest and heavier rainfall in most of the Midwest Sunday and Monday will provide minimal benefit to drought-stricken U.S. corn or soybeans since each crop is nearing the end of its growing season, an agricultural meteorologist said.
"It will help some of the later crops in the north such as in Wisconsin but not much elsewhere," said Andy Karst, meteorologist for World Weather Inc.
The tour on Tuesday found the Indiana corn yield to be above the latest U.S. government estimate, although still its lowest in 17 years, a day after it forecast yields in Ohio at their lowest in 10 years.
A western leg of the tour surveying fields in Nebraska also found yields to be better than expected, although still considerably damaged by drought.
The tour wraps up on Friday, when Pro Farmer will issue national corn and soybean estimates.
The wheat market came under pressure from improved planting conditions in the U.S. Plains after recent rains replenished some soil moisture, although concerns remained over a possible reduction in exports from the Black Sea region.
Further pressure came from a Statistics Canada report that Canadian farmers are on track to harvest 27 million tonnes of all wheat this year -- the second-largest crop since 1996.
-- Karl Plume and Rod Nickel
write for Reuters from Chicago and Winnipeg respectively. Additional reporting by Sam Nelson in Chicago, Naveen Thukral in Singapore and Michael Hogan in Hamburg.