GRAINS-US soy futures pull back from rally as Brazil harvest advances

By Julie Ingwersen

CHICAGO, Feb 9 (Reuters) - U.S. soybean futures fell on Monday on profit taking after a rally last week drove prices to a two-month high well above $11 a bushel, tied to U.S. President Donald Trump's remarks that China may buy more beans from the United States.

The expanding harvest of a record-large Brazilian soybean crop added to bearish sentiment, analysts said, while corn and wheat futures drifted lower amid a lack of supportive news.

As of 12:15 p.m. CST (1815 GMT), Chicago Board of Trade March soybean futures SH26 were down 8-1/4 cents at $11.07 per bushel, retreating from Friday's high of $11.37-3/4, the contract's highest since early December.

CBOT March corn CH26 was down 2-3/4 cents at $4.27-1/2 a bushel and March wheat WH26 was down 2-1/4 cents at $5.27-1/2 a bushel.

Last week's surge in soybean futures, tied to hopes for fresh purchases by China, unleashed a wave of cash soybean sales by U.S. farmers that helped knock futures off their highs by Friday. Soybeans rose last week after Trump said China was considering raising U.S. soybean purchases to 20 million metric tons for the current season. But dealers remain sceptical as higher prices make it uneconomical for China to purchase U.S. beans.

The focus by Monday appeared to shift back to Brazil, where growers in the world's top soy supplier had harvested 16% of the soybean crop as of last Thursday, agribusiness consultancy AgRural said, just above 15% reported a year earlier.

"A lot of this has to do with the Brazilian harvest getting into full tilt," Tom Fritz, a partner with Chicago-based EFG Group.

Ahead of the U.S. Department of Agriculture's monthly world supply-demand report on Tuesday, analysts surveyed by Reuters on average expected the agency to raise its estimate of Brazil's soybean harvest to 179.4 million metric tons, from its previous forecast of 178 million, already an all-time high.

Brazilian crop supply agency Conab is scheduled to release its own production estimates on Thursday.

Traders shrugged off news from the USDA on Monday confirming private sales of 264,000 metric tons of U.S. soybeans to China.

"U.S.-China soybean trade appears to be running out of steam with that growing supply pressure out of South America ever present," said Sean Hickey, an analyst at Bendigo Bank Agribusiness.