Soybeans extend setback from record highs

US soybean futures set a three-week low on Tuesday as a swift harvest and profit-taking before key reports sparked selling that accelerated a five-day setback from record highs.

Nearby soybeans for September delivery were down 5 percent from last week's all-time high of $17.94-3/4 a bushel. Corn futures fell to a seven-week low.

Funds have been liquidating bullish bets heading into US Department of Agriculture supply-demand and crop production reports due on Wednesday amid uncertainty about the extent of crop damage they will show from the worst US drought in more than half a century.

Some traders suspect the markets may have factored in the worst of the drought, which devastated crops across the Midwest.

Also, rains late last month could have improved yields.

"There is some sense out there that a top may be close or in already," Jim Gerlach, president of A/C Trading, said of the markets.

Chicago Board of Trade new-crop November soybeans, the most actively traded contract, were down 1.1 percent at $17.00 a bushel by 2 p.m. Central time, and nearby September soybeans were down 0.9 percent at $16.97-1/2 a bushel. December corn slumped 0.7 percent to $7.77-1/2 a bushel.

Soybean and corn futures set record highs during the summer as the drought slashed harvest prospects at a time when stocks of the crops were already low.

Wednesday's supply-demand report will be particularly scrutinized to see if more supply cuts are made due to the drought and to what extent demand has been cooled by surging prices.