U.S. soybean futures rebounded from a three-month low on Wednesday in a technical-buying and bargain-hunting bounce after tumbling nearly US$3 a bushel from record highs set a month ago.
Soybeans had slumped to just above US$15 a bushel, dragged down by persistent reports of higher-than-expected yields and fund liquidation. But buy-stops kicked in, sending the oversold market higher for the first time in three days.
Corn futures drifted lower on harvest pressure, a slowdown in ethanol production and sharply lower crude oil prices. Wheat edged higher after two sessions of declines, following the rebound in soybeans.
"We tripped low enough (in soybeans) that we triggered some buy-stops. We were getting into some technically oversold territory and to see a spike in the buying activity is not uncommon," said Karl Setzer, a commodity trading adviser at MaxYield Co-operative in West Bend, Iowa.
"The basis is firming like crazy around the countryside. Cash basis levels have improved by 15 to 20 cents in the last 24 hours," he said.
Benchmark Chicago Board of Trade (CBOT) November soybeans rose 1-1/4 cents, or 0.1 per cent, to $15.31-3/4 a bushel after sinking as low as $15.04, the weakest for a front-month contract since June 29 (all figures US$).
Buy-stops kicked in around the low, which was a 61 per cent Fibonacci retracement of the market's June-through-August rally, traders said.
The contract had breached its 100-day moving average this week and filled a chart gap from late June around $15.22.
Grain markets had been under pressure this week from a rapidly progressing harvest and a steady stream of reports that yields, particularly for soybeans, were larger than expected.
Commodity brokerage FCStone late on Tuesday raised its production estimates for U.S. corn and soybeans as the worst U.S. drought in a half century appeared not to have damaged crops as much as had been feared.
"The news that was bullish during the summer has turned around. Rather than the supply getting smaller, it's now getting bigger," said Don Roose, president of U.S. Commodities at West Des Moines, Iowa.
"Acres and yield are projected to be up in the next (U.S. Department of Agriculture) report for soybeans, and for corn the yields are expected to be up moderately," he said.
Grains markets are anticipating similar upward revisions in a report from closely followed advisory firm Informa later this week and a monthly USDA report next week.
CBOT December corn fell 1-1/2 cents, or 0.2 per cent, to $7.56-3/4 a bushel, weighed down by sluggish demand from ethanol producers and exporters and spillover pressure from a drop of nearly $4 per barrel in crude oil prices.
A U.S. Energy Information Administration report on Wednesday showed ethanol output dropped last week by 24,000 barrels per day to 785,000 bpd, the lowest since the agency started publishing production data for the corn-based biofuel in 2010.
CBOT December wheat rose 1-1/2 cents, or 0.2 percent, to $8.73 per bushel after earlier sinking on crop-boosting weather in the U.S. Plains wheat belt and sluggish export demand.
Global buyers continue to bypass U.S. wheat and look to lower-cost grain from rival exporters.
Top importer Egypt bought 240,000 tonnes of French and Argentine wheat in the latest tender by the country's government buyer GASC.
-- Karl Plume writes for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide and Valerie Parent in Paris.