U.S. soybean futures tumbled Tuesday, dropping more than 2% on broad-based commodity selling.

Soybeans for July delivery dropped 29 1/4 cents, or 2.1%, to $13.63 3/4 a bushel.

The market was caught up in commodity wide long liquidation, with investors reducing risk exposure, reflective of the fall in energy and metal futures, said Mike Zuzolo, president Global Commodity Analytics and Consulting.

Investors were sellers across the commodity complex, with strength in the U.S. dollar enticing traders to reduce risk exposure in the market.

Despite the sharp declines, futures prices remained in a broad sideways trading range. Soybeans have just enough residual demand to limit losses, while the absence of Chinese demand makes futures an attractive sale near $14 a bushel, said John Kleist, senior analyst with ebottrading.com.

Meanwhile, forecasts calling for soggy fields in the eastern Midwest and Delta to remain wet, added to the defensive tone. The longer flooded fields keep farmers from seeding corn, it increases the potential for farmers to switch some intended corn acres to soybeans, Zuzolo adds.

Slowing export demand remains a fundamental barrier to sustaining an upside price push as well. Record harvests in South America have cooled demand for U.S. soy exports, with cheaper Brazilian and Argentine supplies an attractive alternative to U.S. supplies.

U.S. corn futures settled mixed, with nearby futures contracts ending at lowest points since late March, as investment money flowed out of old crop commodity contracts, said Kleist. New crop futures however, held firm, supported by ongoing planting delays.

U.S. wheat futures finished mixed, managing to rebound from earlier declines, as poor crop ratings and stalled spring-wheat plantings managed to offset pressure from outside markets, analysts said.

Wheat for July delivery ended up 1 1/2 cents, or 0.2%, at $7.93 1/4 a bushel at Chicago Board Of Trade. At the Kansas City Board of Trade, hard red winter wheat for July delivery rose 0.8% to $8.98 a bushel. Hard red spring wheat for July delivery closed down 0.6% at $9.32 1/4 a bushel at the MGEX in Minneapolis.

Corn for July delivery, the most actively traded contract, ended down 10 3/4 cents, or 1.5%, to $7.23 3/4 a bushel. The new crop December contract climbed 1 cent or 0.2% to $6.62 1/4.

Other Markets

July soyoil futures end 0.89c or 1.5% lower at 57.71 cents per pound, and July soymeal settle $7.40 or 2% lower at $354.90 a short ton. U.S. rough rice futures climbed as traders continued to add risk premium to the market in the face of lagging plantings. July rice finished up 1.3% at $15.39/hundredweight. U.S. oat futures edged higher Tuesday, stabilizing after recent declines, with planting delays in the northern plains underpinning prices. Oats for July delivery settled 1 cent or 0.3% higher at $3.44 a bushel. Ethanol futures dropped in unison with corn and crude oil futures. July ethanol ended down 0.4% at $2.627 a gallon.