Chicago soybeans hiked to a 26- month high as the slash in the estimate of soybean supply surpassed earlier expectation while both corn and wheat saw decline in price due to mild reduction in supply estimate.

The most active corn contract for December delivery dropped nine cents, or 1.5 percent, to 5.7615 U.S. dollars per bushel. December wheat declined 14.5 cents, or 2 percent, to 7.2175 dollars per bushel. November soybean hiked 54.75 cents, or 4.3 percent, to 13.1915 dollars per bushel.

The monthly World Agricultural Supply and Demand Estimates published by U.S. Department of Agriculture (USDA) on Tuesday acted as the dominating factors behind grain performance in the day.

The soybeans market enjoyed a sharp rise as the USDA's reduction in the U.S. soybean supply was far beyond the market expectation. USDA forecasted that the ending stocks of soybean for the 2010/2011 season would be 185 million bushels, which representing a 30-percent decline from October's estimate of 265 million bushels. The analysts earlier expected the number to be 239 million bushels.

Besides, the soybean crop will amount to 3.375 billion bushels, falling from 3.408 billion projected in October and analysts formerly gave a prediction of 3.426 billion bushels.

Market traders were widely surprised by the sharp reduction and noted that the fund has marched into the soybean long position following the release of the report.

Although USDA also cut the supply estimate in corn and wheat, the reductions were basically in expectation and thus, resulted in a mildly decline in the prices.

The estimate of U.S. corn end stocks for 2010/2011 was reduced to 21.01 metric tons from 22.9 metric tons in October and the estimate of U.S. wheat inventories was cut to 23.08 metric tons from October's 23.22 metric tons.

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