U.S. soy sags as Brazil's harvest looms; Fed announcement awaited

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New throughout; updates prices, adds quotes, changes byline, changes dateline from previous PARIS/SINGAPORE

By Julie Ingwersen

CHICAGO, Feb 1 (Reuters) -U.S. soybean futures fell more than 1% on Wednesday as traders focused on the expanding harvest of a likely record-large soy crop in Brazil and awaited the Federal Reserve's decision on interest rates later in the day, analysts said.

Wheat futures sagged on profit-taking a day after climbing to a four-week high, while corn prices turned up, rallying from early declines.

As of 12:48 p.m. CST (1848 GMT), Chicago Board of Trade March soybeans SH3 were down 18-1/2 cents at $15.19-1/2 per bushel. CBOT March wheat WH3 was down 3/4 cent at $7.60-1/2 a bushel while March corn CH3 was up 1-1/2 cents at $6.81-1/4 a bushel.

Soybeans turned lower on expectations of a bumper South American harvest. Brokerage StoneX raised its forecast of the soybean harvest in Brazil, the world's biggest exporter, to a record-high 154.2 million tonnes, from 153.79 million last month. The harvest is under way and about 5% complete, consultancy AgRural said on Monday.

"Brazil's harvest continues to accelerate. We (U.S. soy suppliers) are not competitive," said Don Roose, president of Iowa-based U.S. Commodities.

Expectations for the massive Brazilian crop overshadowed concerns about the size of Argentina's drought-hit harvest, Roose said. CBOT soy futures had early support after a report from the U.S. Department of Agriculture's attache in Buenos Aires on Tuesday slashed its unofficial estimate of the Argentine soy crop to 36 million tonnes, well below the USDA's official forecast of 45.5 million.

"We have got a lot of bullish news (already) dialed in with the Argentine crop loss. Will we see a lower number than the attache? I don't think so," Roose said.

CBOT wheat sagged on profit-taking but the benchmark March contract WH3 stayed inside of Tuesday's trading range. European wheat prices fell, pressured by cheap prices offered by Black Sea exporters in North Africa and the Middle East.

Investors are hoping the U.S. Federal Reserve later on Wednesday will signal an end to its cycle of interest rate hikes as some data suggests easing inflation and wage growth. MKTS/GLOB

Reporting by Julie Ingwersen in Chicago
Additional reporting by Gus Trompiz in Paris and Matthew Chye in Singapore
Editing by Subhranshu Sahu and Matthew Lewis


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