GRAINS-Soy extends fall as rain tempers supply worries
* Soybeans' two-day losses at more than 2 pct
* Rain forecasts offset yield fears, low USDA stock view
* Corn steadies after fall on big US crop, weak dollar helps
PARIS/SYDNEY, Sept 16 (Reuters) - U.S. soybeans fell 1 percent on Monday, adding to a similar drop in the prior session, as forecasts for more rain this week eased concerns about declining U.S. harvest prospects and offset a tighter-than-expected supply outlook from the U.S. government. Corn turned slightly higher, halting a sharp drop since last Thursday's surprise increase in the U.S. Department of Agriculture's production forecast. Wheat also inched up, helped "We are looking at some better rain forecasts later this week in the U.S. and that may assist in helping some of the later soybean crops," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia. Updated U.S. weather models called for more rains later this week, with temperatures also forecast to be lower, analysts said, easing stress on some late-planted soybeans that have endured intense heat and spare rainfall in the past month. The USDA had added to soybean supply concerns on Thursday by making a larger-than-expected cut to 2013/14 ending stocks, casting doubt on the scope for supply to be replenished after last year's drought-hit harvest. Soybeans rose nearly 3 percent after the USDA estimates but have since given up most of those gains on profit-taking and more-favourable weather forecasts. were down 1.1 percent at $13.66-1/2 a bushel. The outlook for soybeans could continue to evolve, with the market awaiting updated U.S. acreage estimates on Tuesday and monthly soybean crush data later this week from the National Oilseed Processors Association. NOPA's data should show the U.S. crush for August at 110.7 million bushels, down 4.9 percent from July and the smallest since September 2011, a Reuters poll of nine analysts showed.
"Clarity around U.S. crop production potential is improving, but still remains uncertain, particularly for soybeans," Deutsche Bank analysts said in a note. "Ample global stocks of grain should keep corn under pressure, though soybeans will remain elevated to ration demand until South American production is ready for export." CBOT December corn came off an earlier drop to edge up 0.2 percent to $4.59-3/4 a bushel. It had fallen in the past two sessions after the USDA surprised the market by raising its crop production forecast to a record, despite unfavourable weather.
CBOT December wheat rose 0.35 percent to $6.43-3/4 a bushel, after falling slightly in Asian trading initially to add to a 1.8 percent drop on Friday. Wheat has been curbed by weakness in corn but continues to enjoy a sizeable premium to its fellow grain because of generally brisk export demand so far this season. A falling dollar, which hit a near-four-week low against a basket of currencies after Lawrence Summers withdrew from the race to be the next Federal Reserve chief, boosted U.S. wheat's competitiveness after a slackening in volumes last week.
* Prices as of 1031 GMT
Product Last Change Pct Move CBOT wheat 643.75 2.25 +0.35 CBOT corn 459.75 0.75 +0.16 CBOT soy 1366.50 -15.00 -1.09 Paris wheat 185.75 -0.50 -0.27 Paris maize 167.00 -1.00 -0.60 Paris rape 372.00 -4.00 -1.06 WTI crude oil 106.85 -1.36 -1.26 Euro/dlr 1.33 0.00 +0.41 * CBOT futures prices are in cents per bushel, Paris futures in
euros per tonne, WTI crude oil in dollars per barrel.