CHICAGO, Dec 18 (Reuters) - U.S. soybean futures dropped 2 percent on Tuesday, their biggest daily decline in more than a month, due to China's decision to cancel a purchase of 300,000 tonnes of U.S. supplies, traders said.
Corn prices also fell, dragged lower by the weakness in soybeans and low demand from end users on the domestic and export front.
Wheat bucked the overall weakness in the grains complex, climbing for only the second time in eight sessions as a round of short covering hit the market when prices for the benchmark Chicago Board of Trade March contract equaled a 5-1/2 month low.
A tender for supplies from Egypt, the world's top buyer of wheat, added support to the wheat market.
The U.S. Agriculture Department said the soybean cancellations also included 120,000 tonnes of supplies sold to unknown destinations in addition to the 300,000 tonne deal that China, the world's top buyer of soybeans, scuttled.
China's move suggested that demand for U.S. soybeans might be slowing down from its robust pace of the past few months, especially with harvest of the South American crop starting soon.
"I am a little surprised but let's look at it in the bigger scope," said Mark Schultz. "I was even more surprised that they bought as much as they did earlier. It is still a big number, even with the cancellations. We are a little bit surprised just because of where the price of beans are still at in China."
CBOT January soybean futures settled down 30-1/4 cents at $14.66 a bushel. Prices fell through key technical support points at the contract's 50-day and 200-day moving averages during the session. It was the front-month soybean contract's biggest drop in percentage terms since falling 2.1 percent on Nov. 15.
CBOT March corn was 4 cents lower at $7.20 a bushel. CBOT March wheat gained 3-1/4 cents to $8.11-1/4 a bushel, settling above its 200-day moving average after hovering near that key technical level for much of the session.
Egypt's main wheat-buying agency, the General Authority for Supply Commodities (GASC), set a tender on Tuesday to buy an unspecified amount of wheat from global suppliers for shipment Feb. 11-20. As part of the tender, GASC is seeking cargoes of 55,000 to 60,000 tonnes of different kinds of wheat, including two different classes of U.S. supplies.
Two major winter storms systems are set to sweep through much of the U.S. Plains and Midwest over the next two weeks leaving welcome soil moisture, said Don Keeney, agricultural meteorologist for MDA EarthSat Weather.
Snowfall ranging from 2 to 4 inches could be expected accompanied by some rain in this week's storm and an even bigger storm is expected next week
"The six- to 10-day outlook is even more intense with 12.00 to 18.00 inches of snow in eastern Nebraska, Kansas and the northern Midwest," Keeney said.
January milling wheat in Paris was off 1.25 euros or 0.5 percent at 256.50 euros, with a firmer euro against the dollar adding to downward pressure.
One European trader said there was a growing belief that prices in Paris were not reflecting the good export outlook with Russia and Ukraine out of the market and "now there is a growing belief that poor harvest weather will also compel Argentina to cut back on exports, too."
SOY SETBACK
Soybeans fell despite concerns over production shortfalls in South America, with further unfavorable weather forecast.
Widespread rainfall moved across Argentina over the weekend causing another slowdown in crop seedings and the rain is expected to continue through Wednesday, Global Weather Monitoring said.
Analysts remain concerned the window in which soybeans must be planted to avoid yield losses is closing, further tightening global stocks.
Estimates for the country's 2012/13 soy harvest, which should start in March, vary wildly. Government officials have said they expect a crop of 55 million tonnes or more while worst-case private estimates reach down to 45 million tonnes.
