Soy ends with minor gains after seesaw price action

US soybeans ended marginally higher on Tuesday after a seesaw session which saw talk of end-user demand and a weaker dollar lend support though gains were limited by an advancing Midwest harvest and accounts of good yields.

Futures rebounded from six-week lows in Asian trading and kept the momentum into the Chicago session up to midday when the benchmark November contract turned negative. But a modest spate of buying near the close nudged prices back into the black.

When prices eased, grain companies took the opportunity to cover their short positions and even make some outright purchases on expectations that U.S. supplies will be tight in the months to come.

"Farmers are going to hold on to their beans, and it could get tight between now and February," said Gerry Gidel, chief feedgrain analyst at Rice Dairy LLC in Chicago.

Soybean exports from South American agricultural powerhouses Brazil and Argentina typically start in the first quarter of the year, and until then end users have to depend on US supplies.

Data from the US Department of Agriculture showed that exporters have already sold nearly 75 percent of the 28.71 million tonnes of soybeans projected for overseas sales in the 2012/13 season (September through August), with 11 more months to go.

But anecdotal accounts of soybean yields surpassing expectations after the worst drought in half a century have given the market a bearish tone in recent weeks. Prices have slumped 10 percent from their peak of $17.94-3/4 set on Sept 4.

On Monday, the November soybean contract fell below $16 per bushel for the first time in 11 weeks.

"Beans in the northern part (of the Midwest) seem to be great," said Jack Scoville, vice president of Price Futures Group.

Prospects of big crops in Brazil and Argentina, concerns of slowing demand from China and the U.S. soybean crush coming in lower than expected last month have been weighing on the market.

Chicago wheat futures erased gains posted during Asian trading to turn lower amid forecasts for rain in the US Plains as seeding of the winter crop advanced. Liquidation of long positions tied to slow export demand also pressured prices.