Chicago | Reuters — U.S. soybean futures on Tuesday extended a setback from the nearly eight-month highs reached a day earlier, as wet weather fueled projections that farmers will plant more fields with the oilseed than previously expected.

Rainy, cool conditions in the U.S. South and Midwest could prompt growers to switch one million to two million acres of land to soybeans that they had initially intended to plant with corn, said Don Roose, president of Iowa-based brokerage U.S. Commodities.

Unfavourable weather can increase soybean plantings by preventing corn plantings, which take place in the same areas earlier in the spring. And recent gains in soybean prices have helped to encourage ideas among traders that soy plantings will be larger than the U.S. Department of Agriculture (USDA) estimated last week.

The potential for a shift in plantings is “growing every day in the Midwest that you get weather problems,” Roose said.

Most-active May soybeans ended down 8-3/4 cents at $9.04-3/4 a bushel at the Chicago Board of Trade (all figures US$). On Monday, the contract touched its highest price since August before falling back.

May corn edged up 2-1/4 cents to $3.56-3/4 a bushel as traders questioned USDA’s estimate, issued on Thursday, for farmers to increase seedings by 6.4 per cent to 93.601 million acres, the third-highest area since 1944.

The agency said farmers planned to sow 82.236 million acres of soybeans, below 82.65 million a year ago and an average trade forecast of 83.057 million.

“It’s kind of hard to envision that many corn acres going in the ground,” said Jim Gerlach, president of broker A/C Trading in Indiana.

Still, many farmers will not decide for two weeks whether to switch some acres to soybeans because of unfavourable weather, said Terry Reilly, senior commodity analyst for Futures International in Chicago.

“Right now I think it’s too early to determine that,” he said.

Instead, profit taking weighed on soybean futures, Reilly said.

Wheat futures also ended lower, with the most-active May contract slipping 3/4 cent to $4.74 a bushel at the CBOT.

USDA, in its first national crop progress report of the year, rated 59 per cent of U.S. winter wheat as being in good-to-excellent condition. That topped analysts’ estimates for 57.6 per cent of the crop, which will be harvested this summer, and the five-year average of 42 per cent.

The agency said it expected to issue a figure on U.S. corn planting next Monday in the weekly progress report.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.