Ample supply outlook halts rally in soybeans, corn
Adds analyst comment, updates prices
CANBERRA, July 24 (Reuters) -Chicago soybean and corn futures fell on Wednesday, as a rally fuelled by fears of adverse weather in parts of the United States ran out of steam and investors refocused on expectations of plentiful global supplies.
Wheat futures also fell, with grain from ongoing harvests in the United States and Russia hitting the market.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.4% at $10.71-3/4 a bushel, as of 0154 GMT.
The contract rose nearly 4% over Monday and Tuesday on fears that hot, dry weather in parts of the United States could shrink the crop.
CBOT corn Cv1 slipped 0.4% to $4.15-1/2 a bushel, having risen about 3% in the previous two sessions, while wheat Wv1 fell 0.5% to $5.40-1/4 a bushel.
Speculators anticipating ample supplies have amassed large net short positions in all three contracts and prices are near their lowest since 2020. Some of the gains of recent days have been fuelled by their short-covering, traders say.
Joe Biden's decision to drop out of the U.S. presidential race also lifted soybean and corn prices by reducing the chances of a Donald Trump victory and a renewed U.S.-China trade war, analysts said.
Despite the coming hot and dry weather in the U.S. Midwest, conditions for soy and corn look pretty good, said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.
Arid conditions in parts of the corn-producing Black Sea region are also unlikely to puncture expectations of ample supply, he said, adding that South American producers are shipping large amounts of corn and soy.
"It's hard to see a very supportive market in the near term," he said.
In wheat, agricultural consultancy Sovecon raised its forecast for Russia's 2024 grain crop to 130.5 million tons from 127.4 million tons, lifting its wheat estimate by around 100,000 tons to 84.2 million tons.
Cheap wheat supply from top shipper Russia has kept a lid on prices.
Scouts on the first day of an annual U.S. crop tour on Tuesday projected spring wheat in southern and east-central North Dakota will produce the highest yields in tour records dating to 1994.
Reporting by Peter Hobson; Editing by Subhranshu Sahu
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