Soybeans drop on profit-taking as rains may boost yields

Soybean futures fell for a third straight day on Friday and snapped a five-week winning streak, as investors banked profits and recent rains in the farm belt looked set to help some of the crop recover from the worst drought in half a century.

A lower-than-expected US production forecast from closely followed analytical firm Informa Economics lifted soybeans from early lows, but the market slipped as investors squared positions ahead of the weekend and ahead of next week's monthly government supply-demand report.

Wheat jumped 1.5 percent on concerns about thinning global supplies due to adverse weather in key exporting nations, including Russia and Australia. The dollar's 1 percent drop after a weaker-than-anticipated jobs report offered further support. A weaker dollar makes US exports more competitive in the world market.

Corn inched higher on spillover support from wheat, but remained bound in a recent trading range as investors awaited next week's US Agriculture Department report which was expected to show a sharply reduced US crop.

Chicago Board of Trade new-crop November soybeans fell 10-1/2 cents, or 0.6 percent, to $17.36-1/2 a bushel.

The benchmark contract declined 1.1 percent this week after five straight weeks of gains. Commodity funds sold an estimated net 5,000 soybean contracts on the day, trade sources said.

Earlier in the day the market bounced after analytical firm Informa Economics cut its US soy crop forecast by 5 percent to 2.639 billion bushels in a midmorning report, a deeper cut than many had expected.

Private analysts on average expected the USDA to trim its crop forecast next Wednesday to 2.657 billion bushels from 2.692 billion in August, although some expected a slight increase because of rains in recent weeks across northern and eastern Midwest.

Wheat futures jumped for a second straight day in the strongest two-day rally since mid-July on continued concerns about weather-reduced global supplies and possible export curbs from major suppliers in the Black Sea region.

Dry weather in key production areas of Australia, the world's No. 2 exporter, and a dry pattern in the southern US Plains wheat belt ahead of autumn planting added support.

CBOT December wheat rose 13-1/4 cents, or 1.5 percent, to $9.05 a bushel. Climbing for a second straight week, the 1.7 percent weekly gain was the strongest in eight weeks. Commodity funds bought a net 3,000 wheat contracts on the day, trade sources estimated.

Corn futures rose modestly, supported by expectations for another deep cut by the USDA to its production forecast next week, although prices remained in a recent narrow range near $8 per bushel.

Analysts on average expected the government to reduce its corn production forecast to 10.380 billion bushels, down 3.7 percent from its August forecast and the lowest in nine years.

New-crop CBOT December corn added 1 cent to settle at $7.99-1/2 a bushel, essentially unchanged from a week ago.