U.S. soybean futures slumped on Tuesday on expectations that near-record South American production will reduce demand for the U.S. crop, while corn and wheat futures edged higher.
Dealers said the market's focus was increasingly turning to USDA’s supply-demand and quarterly inventory reports due out on Friday, with investors reluctant to take large positions ahead of the data.
Traders were evening up positions ahead of the reports due to a "natural tendency for risk aversion," said Jim Gerlach, president of A/C Trading.
Trading has been particularly volatile following previous January supply-and-demand and inventory reports, with corn making limit moves on the day of the release six times in a row.
"You're going into a major crop report; you've seen a substantial break in prices; and these reports tend to be game changers," Gerlach said.
Chicago Board of Trade March soybeans slipped 1-1/2 cent, or 0.1 percent, to $13.87 a bushel by 11:45 a.m. Central time (1745 GMT).
CBOT March corn rose 5 cents, or 0.7 percent, to $6.90-1/2 a bushel, while March wheat gained 2-1/4 cents, or 0.3 percent, to $7.53-1/2.
Traders were waiting to see how the USDA adjusts its estimates for soybean and corn production in South America on Friday as Brazil and Argentina compete with the United States for export business.
The USDA is expected to increase its estimate for Brazil's soybean crop 0.9 percent from last month to a record-large 81.8 million tonnes, according to a Reuters poll. The outlook for Brazil's corn crop is expected to rise 0.4 percent to 70.257.
The USDA is projected to increase its forecast for global soybean inventories at the end of the crop's marketing year on Sept. 1 by 0.4 percent from last month to 60.2 million tonnes, according to a poll. The forecast for global corn inventories is seen down 0.03 percent at 117.572 million tonnes.
"South American crop expectations are keeping a lid on soybean prices," said Ker Chung Yang, a senior investment analyst at Phillip Futures in Singapore.