* Soy futures drop as cash basis bids tumble
* Soymeal retreats from new contract high
* Moderate temperatures, rain benefit pollinating corn
(Recasts with soybean losses, adds closing prices)
By Tom Polansek
CHICAGO, July 23 (Reuters) - U.S. soybean futures tumbled on
Tuesday as cash basis bids weakened in key locations in the U.S.
Midwest and farmers sold some of their scarce old-crop supplies.
Corn futures also came under pressure, with the new-crop
contract falling to its lowest level in more than 2-1/2 years as
forecasts for nearly ideal weather during the crop's key
development phase buoyed hopes for a record harvest.
Soybeans suffered the steepest losses as a rally to 10-month
highs on Monday sparked selling by farmers that temporarily
eased tight supply in some areas, dealers said.
Additional pressure stemmed from unconfirmed rumors that
China, the world's top soy importer, may sell 3 million tonnes
of the oilseed from government reserves, potentially reducing
its demand for U.S. soybeans, they said.
"It looks like the Gulf has all the beans they need for the
time being," Mark Gold, managing partner for Top Third Ag
Marketing, said about the Gulf of Mexico, the major export
gateway for U.S. soy.
Talk about China's reserves, "whether it is true or not, has
really knocked the wind out of this thing," he said.
Chicago Board of Trade August soybeans sank 3.8
percent to $14.62-1/2 a bushel, while new-crop November soybeans
slid 2.2 percent to $12.60-1/4 a bushel.
August soymeal dropped 2.9 percent to $487.80 per
short tonne, pulling back from a contract high of $521. The
contract on Monday climbed the daily, exchange-imposed trading
limit of $20 as U.S. processors scrambled to find old-crop soy
supplies to crush into meal.
Soybean inventories are expected to reach a nine-year low by
Aug. 31 due to strong demand and a historic U.S. drought that
reduced last year's harvests.
Moderate temperatures and occasional light rain over the
next week to 10 days will aid the corn crop in the U.S. Midwest
and boost soybean growth, according to Global Weather
The favorable conditions are arriving just as corn is
starting to pollinate, the most important period of development
for determining the size of the harvest.
"It couldn't be better," Paul Butler, a farmer in Macon,
Illinois, said about the weather. "We're getting perfect rains
right where we need them."
September corn fell 3.4 percent to $5.22-1/2 a bushel,
and new-crop December corn fell 2.5 percent to $4.85-1/2.
Food companies, ethanol producers and livestock producers
hope a massive harvest will replenish inventories that are
expected to drop to a 17-year low by Aug. 31.
The outlook for beneficial weather overshadowed declining
crop condition ratings and a sale of 106,400 tonnes of U.S. corn
to Mexico, traders said.
The USDA on Monday rated 63 percent of corn as good to
excellent as of Sunday, down three percentage points from a week
earlier, and 64 percent of soybeans as good to excellent, down
one percentage point.
Wheat futures edged lower, with the September contract
dipping 0.6 percent to $6.53-3/4 a bushel.
Prices at 2:34 p.m. CDT (1934 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 522.50 -18.25 -3.4% -25.2%
CBOT soy 1462.50 -57.75 -3.8% 3.1%
CBOT meal 487.80 -14.60 -2.9% 16.0%
CBOT soyoil 44.78 -0.63 -1.4% -8.9%
CBOT wheat 653.75 -6.00 -0.9% -16.0%
CBOT rice 1577.00 36.50 2.4% 6.1%
EU wheat 190.50 -2.00 -1.0% -23.9%
US crude 107.27 0.33 0.3% 16.8%
Dow Jones 15,591 46 0.3% 19.0%
Gold 1343.21 8.17 0.6% -19.8%
Euro/dollar 1.3226 0.0043 0.3% 0.2%
Dollar Index 81.9870 -0.2320 -0.3% 2.8%
Baltic Freight 1127 -8 -0.7% 61.2%
* Paris futures prices in euros per tonne, London wheat in
pounds per tonne and CBOT in cents per bushel.
(Additional reporting by Julie Ingwersen in Chicago, Naveen
Thukral in Singapore and Ivana Sekularac in Amsterdam; Editing
by Marguerita Choy, John Wallace and Nick Zieminski)