U.S. soybean futures fell Monday after weekend rains benefited soy crops at a key stage in their development, raising the prospect of better yields at harvest.

Chicago Board of Trade August soybeans, thinly traded ahead of their expiration Aug. 14, settled down 48 3/4 cents, or 2.9%, at $16.07 1/2 a bushel. Most-active November soybeans fell 44 1/2 cents, or 2.7%, to $15.84 1/4 a bushel.

U.S. soybean crops are setting pods before filling them out with beans, a stage when weather has a strong effect on eventual yields. The weekend rains exceeded expectations in states like Illinois and Indiana.

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Further rains forecast this week and over the weekend could also substantially benefit crops, traders said. Much of the soybean crop will be approaching the end of its pod-setting phase in about a week, and after that point rains will mainly determine how large the beans grow inside soy plants' pods.

"We're just moving past the point where the market's going to be focusing on the crop and it's going to start looking at demand" instead, said Doug Houghton, an analyst at Brock Associates, a commodity-advisory firm in Milwaukee.

Analysts warn that soybean supplies will remain tight even if rains help the U.S. crop recover significant yield potential. Demand for U.S. soybeans has also remained fairly strong. The U.S. Department of Agriculture on Monday said private exporters reported selling 106,000 metric tons of U.S. soybeans to China for delivery during the 2012-2013 marketing year.

Expectations for large soybean plantings in South America to help boost supplies next year may have added pressure for deferred futures. Brazilian consulting firm Celeres on Monday forecast that farmers in the country will plant soybeans on 27.14 million hectares (67.06 million acres) in the months ahead, up 8.1% from a year earlier. Given a baseline scenario in which farmers manage to harvest 2,877 kilograms (6,343 pounds) of soybeans per hectare, the South American country's 2012-13 production of the oilseed will rise 18% year-over-year to a record 78.1 million metric tons.

Soy and grain futures could be volatile all week as traders position themselves ahead of key USDA reports due Friday, traders said. The reports are expected to include updated yield forecasts for the corn and soy crops.