CHICAGO, Jan 18 (Reuters) - Chicago Board of Trade soybean futures set a two-year low on Thursday and corn fell to a three-year low before the markets turned higher on short covering and technical buying, analysts said.
Expectations for adequate global supplies and improved crop weather in Brazil, the world's top soybean exporter, continued to hang over the markets.
"The soybean market has been supported by Brazilian production problems, but the weather has improved in Brazil and their harvest is just beginning," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Most-active CBOT soybean futures were up 9-1/4 cents at $12.15 bushel by 12:50 p.m. CST (1850 GMT) after falling earlier to $12.01, the lowest price since November 2021.
Corn futures rose 1-3/4 cents to $4.44 a bushel after hitting $4.36-3/4, the lowest price since December 2020.
"The soybean and meal markets are the most oversold they have been in eight months and that may eventually generate some sort of recovery rally as the market works its way out of that oversold condition," Pfitzenmaier said.
Traders are trying to determine the fair market value for soybeans after recent declines, said Don Roose, president of brokerage U.S. Commodities.
"It's more of an exhaustive rally," Roose said.
Beneficial rains have eased concerns about crop damage in Brazil due to drought. Consultancy Agroconsult on Thursday still lowered its forecast for Brazil's soybean harvest to 153.8 million metric tons from 161.6 million tons in November.
A decline in soybean production in Brazil would be necessary to offset an expected bumper harvest in Argentina, though, analysts said.
"There are some concerns for the Brazilian crop, but any losses seem like they will be recouped by a rebounding Argentinian crop," said Andrew Whitelaw, an analyst with Episode 3 in Canberra.
CBOT wheat was up 3-1/2 cents at $5.86 a bushel. K.C. March wheat climbed 12 cents to $6.06, while MGEX March wheat was up 10-1/2 cents at $6.90-3/4. K.C. and MGEX wheat set contract lows this week. (Reporting by Tom Polansek in Chicago. Additional reporting by Gus Trompiz in Paris and Peter Hobson in Canberra; Editing by Rashmi Aich, Dhanya Ann Thoppil, Susan Fenton and Barbara Lewis)
