Soybeans retreat as South American harvest looms

* Soybeans fall as export business shifts to S.America

* Corn turns up on technical buying, new 31-month high

* Egyptian demand despite turmoil underpins wheat (Updates with U.S. trading, changes dateline from previous LONDON, changes byline)

By Julie Ingwersen

CHICAGO, Feb 11 (Reuters) - U.S. soybean futures fell for a second day on Friday amid concerns that importers could cancel their purchases of U.S. supplies in favor of soybeans from Brazil, which is on the cusp of harvesting a record crop.

Some additional pressure stemmed from a downturn in U.S. crude oil futures, following news that Egyptian President Hosni Mubarak had stepped down.

At the Chicago Board of Trade, corn futures turned up and extended their 31-month high on technical buying against a backdrop of tight U.S. and world supplies, while wheat edged higher on export buying and spillover demand from corn.

Nearby soybean futures posted the biggest moves early, with front-month March down 12 cents, or 0.8 percent, at $14.21 per bushel as of 10:30 a.m. CST (1630 GMT).

"Business is shifting to South America. Brazilian beans are cheaper than we are. It's a seasonal shift and there's a big crop in Brazil, and I think Argentina's crop is bigger than some people think," said Paul Haugens, vice president for Newedge USA.

Haugens noted that weekly U.S. export data on Thursday showed that China, the world's largest soy buyer, had canceled purchases of nearly 262,000 tonnes of U.S. soybeans for 2010/11 delivery.

"We saw the cancellations of old-crop yesterday and that may have gone under the radar, but old-crop (futures) are down on the big seasonal shift in exports," Haugens said.

New-crop soybean contracts traded narrowly mixed, supported by fears of a possible shortfall in U.S. soybean plantings this spring, if farmers favor corn or other crops. New-crop November soybeans were down 1-1/2 cents at $13.84.

"New-crop is trying to buy acreage," a CBOT soybean trader said.

CORN EXTENDS LONG-TERM HIGH

CBOT corn rallied from early declines, extending a steep advance this week after the U.S. Department of Agriculture slashed its forecast of U.S. corn stockpiles.

Front-month March was up 4-1/2 cents at $7.03 per bushel after setting a 31-month top at $7.05.

"We have been positive on corn prices and believe that the combination of strong demand growth, continued Chinese imports, coupled with lowered yields in the U.S. and weather disruptions in Argentina continue to support corn prices higher still," Barclays Capital said in a market note on Friday.

Wheat turned higher on corn's strength and news that Egypt had bought 170,000 tonnes of soft wheat, including 55,000 tonnes of U.S. soft red winter wheat.

The most populous Arab nation entered global markets for a second time in a week, suggesting that the procurement process for the country had not been disrupted by political turmoil.

News that Tunisia was seeking wheat also lent support.

CBOT wheat came under pressure early, hit by profit-taking and forecasts for much warmer weather in the southern U.S. Plains wheat belt.

CBOT March wheat was up 2-1/4 cents at $8.65 a bushel by 11 a.m. CST (1700 GMT).

(Source: http://www.futurespros.com/news/grains-news/grains-soybeans-retreat-as-south-american-harvest-looms-1000007420)