U.S. wheat futures fell to a three-week low on Monday, hit by chart-based selling as well as concerns that U.S. export business is falling short of forecasts, analysts said.
Corn futures also hit a three-week low, extending a three-session skid, while soybeans ended higher after a seesaw session ahead of a monthly crop report from the U.S. Department of Agriculture.
At the Chicago Board of Trade, March wheat fell 12-1/4 cents to settle at $8.48-3/4 a bushel. March corn ended down 7-1/4 cents at $7.30 a bushel, while January soybeans settled up 2-1/2 cents at $14.74-3/4 a bushel.
Wheat posted the biggest percentage loss, pressured by technical selling and caution ahead of Tuesday's USDA crop data. The trade expects USDA to slightly raise its forecast of U.S. 2012-13 wheat ending stocks, due in part to thin export demand.
Selling accelerated as the benchmark CBOT March wheat contract fell below chart support at $8.51-1/2, a level that had held for four straight sessions last week. The contract dipped to an intra-day low of $8.46-3/4, its lowest level in three weeks.
Weekend news included wheat purchases by Saudi Arabia and Iraq, but traders said the U.S. won only a small share of the business.
The drop in CBOT futures reflected "continued disappointment and concern about the U.S. export program, and the possibility that we will raise ending stocks," said Shawn McCambridge, grains analyst with Jefferies Bache in Chicago.
"If we increase (U.S.) ending stocks, it offsets some of that possible concern about next year's production levels," McCambridge said, acknowledging poor conditions in the southern U.S. Plains winter wheat belt.
The U.S. hard red winter wheat crop, already weakened by dry conditions in the Plains, is facing a threat this week from damaging cold weather, a factor that limited losses in hard red winter wheat futures on the Kansas City Board of Trade.
On the export front, Saudi Arabia bought 295,000 tonnes of hard wheat from the European Union, Australia and the U.S., while Iraq bought 350,000 tonnes of wheat from Australia and Romania.
Argentina will allow only 4.5 million tonnes of wheat exports this campaign, against six million previously planned, in response to a rain-plagued harvest, a local newspaper reported.
And the USDA confirmed that private exporters sold 115,000 tonnes of U.S. wheat to Egypt, including 60,000 tonnes of soft red winter wheat and 55,000 tonnes of soft white wheat. However, traders said the market had already factored in the news.
Traders noted long liquidation in CBOT corn a day ahead of the U.S. Department of Agriculture's monthly supply/demand reports. Analysts expect USDA to raise its forecast of U.S. corn ending stocks for 2012-13 due to weak export demand.
Underscoring the concerns, USDA reported export inspections of U.S. corn in the latest week at 7.861 million bushels, below a range of trade estimates for nine million to 15 million.
Further pressure stemmed from news that a South Korean feedmaker issued an international tender for corn and feed wheat but excluded corn from the U.S., the world's biggest supplier.
"Some are saying it's because of U.S. corn quality, not just price," Mike Zuzolo, president of Global Commodity analytics in Lafayette, Indiana, said of the snub. "I think that added another layer of bearishness heading into the (USDA) report, and reinforced the pre-report nervousness about what USDA may say as far as reduced demand."
Severe drought in the heart of the U.S. Corn Belt this summer contributed to the spread of aflatoxin, the toxic byproduct of a mould that tends to spread in corn in drought years.
Soybean futures settled modestly higher after a back-and-forth session in which traders adjusted positions ahead of USDA's monthly data. Analysts expect USDA to lower its forecast of U.S. 2012-13 soybean ending stocks to 130 million bushels, from 140 million in November.
In a bearish technical signal, benchmark January soybeans set a one-month high on Friday but then reversed and closed below the previous session's low on profit-taking.
Firm cash markets for U.S. soybeans amid historically strong crush margins and robust export demand have helped drive a three-week rally in nearby soybean futures. But favourable crop weather in Brazil has boosted prospects for a record-large crop in that country, with harvest expected in early 2013.
-- Julie Ingwersen covers agricultural commodity markets for Reuters in Chicago. Additional reporting for Reuters by Valerie Parent in Paris and Mayank Bhardwaj in New Delhi.