GRAINS-Soybeans dip even as dry weather hits Brazilian supply outlook

GRAINS-Soybeans dip even as dry weather hits Brazilian supply outlook

CANBERRA, Nov 29 (Reuters) - Chicago soybean futures shed on Wednesday some of the gains from the previous session even as traders assessed the impact of hot and dry weather conditions in Brazil that are reducing yields in the world's top producer.

Wheat futures rose, while corn fell.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.2% at $13.44-1/2 a bushel, as of 0607 GMT, after rising 1.3% on Tuesday.

"Brazil is the focal point at the moment," said Ole Houe at agriculture brokerage IKON Commodities in Sydney.

Uncertainty over the crop size would likely cause price volatility in the short term, Houe said, adding that Brazil's soybean harvest would still be large.

"Even if we lost 20 million tons, we'd still have more than the 5-year average," he said. "We can lose a lot of crop before it becomes really problematic globally."

A consultant at MB Agro said he expected Brazil to reap 155 million metric tons of soybeans in the 2023/24 cycle, 10 million tons below initial expectations, after drought affected farmers in Mato Grosso state who planted their crop early.

Also supporting soybean prices was a USDA confirmation that U.S. exporters sold 123,300 metric tons of beans to unknown destinations for 2023/24 delivery.

Chicago soybeans rose to a 2-1/2-month high of $13.98-1/2 a bushel in mid-November on fears that dry weather in South America would reduce harvests.

Prices have since drifted lower, but speculators still hold a net long soybean position and commodity funds were net buyers on Tuesday, traders said.

In other crops, CBOT corn Cv1 fell 0.1% to $4.73 a bushel and wheat Wv1 rose 0.3% to $5.73-1/2 a bushel.

For wheat, Agritel said Russian production could reach 90 million tons in 2024 after favourable autumn sowing and Russian supply including that drawn from stocks could be above 100 million tons for a third consecutive season in 2024/25.

Russia is the world's biggest wheat exporter, and plentiful shipments from the country have held wheat prices near three-year lows in recent months.

However, Russia's Izvestia newspaper reported that the government may impose a ban on grain exports if its stockpiles fall to 10 million tons.

Russian export prices for 12.5% protein wheat for FOB delivery in January rose by $5 last week to $235 a ton, helped by a drop in shipments due to stormy weather in ports, the IKAR agriculture consultancy reported.

Ukrainian farmers have almost completed their winter crop sowing, seeding about 5.96 million hectares as of Nov. 28, the country's agriculture ministry said on Tuesday.