CHICAGO (Dow Jones)--Soybean futures on the Chicago Board of Trade fell
 Tuesday, settling at over two-month lows as prospects for beneficial rains to
 move into dry areas of the soybean belt sent buyers running for cover. 
  
   November soybeans ended 18 cents lower at $6.52 3/4; December soymeal settled
 $3.70 lower at $205.90 a short ton; and December soyoil ended 59 points lower
 at 23.14 cent a pound. 
  
   "The rains forecasted for the Midwest would be a definite benefit to soybean
 crops heading through its critical pod filling stage, and could produce
 legitimate improvements in yields if the rains emerge," said Jack Scoville,
 grains analyst with the Price Group in Chicago. 
  
   Speculative long liquidation was a featured attraction, with private
 forecasters in more agreement on predicting potential rainfall. The market's
 growing confidence in weather forecasts calling for Midwest rains served as a
 spark to flush out some previously established long positions. 
  
   Joel Widener, meteorologist with Earth Satellite's Cropcast, said between
 Thursday and Saturday that two-thirds of the soybean belt should receive 1/2
 inch of rain. Early in the 6- to 10-day period rain chances improve, with dry
 areas of central Illinois on tap to receive about 1 inch rains Sunday into
 Monday, with the northern Midwest including northern Illinois potentially
 receiving between 1- and 2-inch rains. 
  
   General rain coverage is seen over the next seven days, with a bias toward
 heavier rains in the north and western belts, Widener said. Temperatures are
 expected to cool down in the second half of the week, with no excessive heat
 expected to build back in the region in the next 10 days, he added. 
  
   The rain potential has taken upside urgency from the market, with speculative
 funds whittling down some of their non-performing long positions, said John
 Kleist of Kleist Agricultural Consulting in Arlington Heights, Ill. The absence
 of strong export demand coupled with weak technicals failed to provide any
 incentive for bullish traders to take a stand heading into Friday's U.S.
 Department of Agriculture crop report. 
  
   However, strong commercial support near session lows kept a floor under
 prices, with futures settling in the middle of the day's trading range. 
  
   In pit trades, ADM Investor Services bought 500 November and Bunge Chicago
 bought 1,000 November. 
  
   Cargill Investor Services, Man Financial and RJ O'Brien each sold 1,000
 November; Refco sold 1,500 November; Fimat and Citigroup each sold 500
 November; and ABN Amro and Calyon Financial each sold 300 November. Commodity
 funds were estimated sellers of 6,000 contracts. 
  
   South American soybean futures ended lower across the board. The September
 futures settled 19 cents lower at $6.78. 
  
   SOY PRODUCTS 
  
   Soy product futures fell in unison with soybeans, sliding to two-month lows
 on technically inspired speculative selling pressure. 
  
   A continuation of the recent long liquidation pattern weighed on soyoil
 futures, with oil share stumbling lower. The absence of any fresh supportive
 fundamental news, technical weakness coupled with the weather-induced losses in
 soybeans uncorked speculative selling to extend the lower trend in soyoil,
 traders said. 
  
   December oil share ended at 35.98%, and the November/December crush finished
 at 54 3/4 cent. 
  
   In soymeal trades, Cargill bought 600 September; Calyon Financial and
 Goldenberg Hehmeyer each bought 200 December; and Refco bought 300 December.
 Cargill Investor Services sold 300 September and 600 December; Fimat sold 300
 December; and Man Financial sold 200 December. 
  
   In soyoil trades, Prudential Financial bought 500 December; Bunge Chicago
 bought 1,400 December; ADM Investor Services bought 500 December; and Citigroup
 bought 600 December. Fimat sold 400 December; UBS Securities sold 1,800
 December; Refco sold 800 December; Man Financial sold 1,200 December; and
 Cargill Investor Services and Iowa Grain each sold 300 December. Commodity
 funds were estimated sellers of 5,000 contracts.