* Soy falls after November sets new contract high
* Long liquidation, unwinding of spreads in soybeans
* Corn, wheat in the red
* Isaac barrels toward Gulf Coast
By K.T. Arasu and Sam Nelson
CHICAGO, 27 Soybeans fell on Monday as investors took profits and unwound bull spreads after the market set a new peak, with traders watching for crop damage as Tropical Storm Isaac churned toward the U.S. Gulf Coast.
Corn and wheat futures at the Chicago Board of Trade were also lower, weighed down as new-crop November soybeans fell from a contract high of $17.60-1/2 per bushel as U.S. crude oil tumbled 68 cents to settle at $95.47 a barrel.
Corn futures were down four straight sessions, but the December contract held around the $8-per-bushel level after setting a record high $8.49 on Aug 10 as the worst drought in 56 years devastated the crop in the United States.
After the market closed, the U.S. Department of Agriculture's crop progress report showed that 6 percent of the corn crop had been harvested as of Sunday, well below the 10 percent expected by analysts polled by Reuters.
The harvest was 6 percent complete in Illinois, the No 2 corn state, up from 3 percent the previous week. In top corn state Iowa, the harvest was 2 percent complete while in Nebraska, it was 4 percent, up from 1 percent previously.
Isaac was barreling across the Gulf of Mexico after skimming past south Florida. Based on its current track, it was due to slam into the Gulf Coast between Florida and Louisiana Tuesday night or early Wednesday -- the seventh anniversary of Hurricane Katrina, which devastated New Orleans.
Grain companies Cargill Inc and Archer Daniels Midland Co shut down some export elevators in Louisiana as a precaution. [ID: nL1E8JRD5E]
Barge traffic between Baton Rouge, Louisiana, and the U.S. Gulf has been suspended due to the threat from Isaac, the Crescent River Port Pilots Association said.
The Mississippi River is a major channel for the movement of grains produced in the Midwest farm belt to export terminals at the Gulf of Mexico for shipment around the world.
Grain movement is set to pick up in the coming weeks as farmers in the Midwest -- where 75 percent of the country's corn and soy crops are grown -- begin harvesting in earnest.
Cash market prices for soybeans in the Midwest have begun to fall in anticipation of the harvest, which was also seen weighing on futures, which have rallied to a record high after the worst drought in 56 years devastated crops.
Traders also said cash prices for soymeal were lower, and crush margins also dropped.
"There is some long liquidation in the front end of soybeans," said Sterling Smith, market specialist for Citigroup. "There is also some unwinding of longs in corn."
The U.S. National Hurricane Center does not expect Isaac to strengthen beyond Category 1, the weakest type of the five-step Saffir-Simpson scale of hurricane intensity. There had been fears it would be a Category 2 storm.
New-crop November soybeans fell 0.7 percent to end at $17.18-3/4. December corn was down 1.0 percent to end at $8.00-3/4, while December wheat was down 0.8 percent at $8.81-1/4.
Wheat was under additional pressure as Egypt's main state-run wheat buyer chose not to buy wheat from the United States in a third tender in a row.
The General Authority for Supply Commodities (GASC) instead sourced the grain from Russia and Romania, underscoring how U.S. prices were high and uncompetitive in the export market.
The sale by Russia also helped to calm speculation that the country could impose a ban on exports due to drought reducing wheat production in the world's No. 4 exporter this year.
"Russian and Ukrainian wheat was offered extensively in the Egyptian tender on Saturday and both countries are still firmly in the export market despite the worries about export restrictions after the poor crops," one trader said.