Soybeans drop on rain forecast; USDA report eyed

(Reuters) - Chicago soybeans fell more than 2
percent on Monday, unwinding last week's gains, on forecasts for
light rain in some regions of the drought-battered U.S. Midwest
over the coming days.
    New-crop corn slid nearly 1 percent after a steep rally of
more than 50 percent in the last two months, while wheat dropped
following a more than 3 percent gain in the previous session.
    "There's cooler weather and a little bit of light rain
forecast, which I think is keeping the market a bit depressed,"
Andrew Woodhouse, a Sydney-based analyst at Advance Trading
Australasia said.
    But the drop in prices should be limited as investors await
fresh trading cues from a key supply-demand report from the U.S.
Department of Agriculture later this week that will quantify
crop damage from the worst drought in 56 years.
    Chicago Board Of Trade November soybean fell more than
2 percent to $15.94 a bushel by 0038 GMT after climbing 1.7
percent last week. Soybeans dropped to a low of $15.75-3/4 a
bushel earlier in the session, lowest since July 27.    
    December corn fell about 1 percent to $8-1/2 a bushel
after climbing 1.5 percent on Friday.
    Front-month wheat fell 0.7 percent to $8.84-3/4 a
bushel, having closed up 3 percent in the previous session.
    An upbeat U.S. jobs report and private forecasts that the
drought has hurt U.S. crops more than government surveys
indicate fueled strong grains in the grain complex on Friday. 

    WEATHER IMPACT
    Private crop analysts have been slashing their production
estimates to below current government forecasts and the market
now needs USDA confirmation before deciding on its next move.
    Closely watched analytics firm Informa Economics on Friday
predicted USDA's Aug. 10 crop report will estimate the U.S. corn
crop at 10.338 billion bushels, according to traders. That was
down 10 percent from Informa's previous forecast and 20 percent
below the USDA's latest estimate of 12.97 billion bushels.
    Informa projected final U.S. 2012 corn production at 11.224
billion bushels, traders said. Informa does not publicly release
its estimates. 
    Doane Advisory Services forecast corn production at 10.792
billion bushels following an annual crop tour, while a Farm
Futures Magazine survey put the corn crop even lower at 9.57
billion bushels.
    Meanwhile, Russian grain exports are off to a fast start in
the new agricultural year even though Russia's exportable
surplus has shrunk drastically in the drought, surprising
analysts and raising questions about how long Russia can sustain
the pace. 
    Investment bank Goldman Sachs said it saw growing upside
risks to wheat prices in the coming months due to continued dry
weather in countries such as Argentina, India, Australia and the
former Soviet Union. 

  Grains prices at  0038 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     884.75    -6.50  -0.73%   +34.67%     622.15   51
  CBOT corn      800.50    -7.00  -0.87%   +21.56%     615.28   56
  CBOT soy      1594.00   -34.75  -2.13%   +29.86%    1167.45   40
  CBOT rice      $15.79   -$0.18  -1.16%    +7.82%     $14.47   57
  WTI crude      $91.09   -$0.31  -0.34%   -11.53%     $98.56   61
  Currencies                                                
  Euro/dlr       $1.241  -$0.053  -4.10%    -4.89%
  USD/AUD         1.056    0.019  +1.82%    +1.79%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential

 (Reporting by Colin Packham; Editing by Himani Sarkar)