HAMBURG: Chicago soybeans, wheat and corn fell on Wednesday, undermined by the dollar's strength plus good weather in several world production regions as Brazil makes progress gathering a record-large soybean crop.
"Soybeans, wheat and corn are seeing a limited pullback today with no real fundamental factors currently visible to generate follow through rises after recent price strength," said Matt Ammermann, commodity risk manager at INTL FCStone. "The stronger dollar will also be a burden in export markets for US grains and soybeans."
"I think recent price strength was largely generated by investment fund money flows rather than substantial changes in fundamental factors. Funds continue to favour commodities, but the recent upward push seems to be slowing."
Chicago Board of Trade most-active March wheat was down 0.1 percent to $4.49 a bushel at 1118 GMT, moving away from Monday's seven-and-half month high of $4.56 a bushel.
March soybeans fell 0.1 percent to $10.43-1/4 a bushel after touching their lowest since Feb. 8 of $10.42-1/2 a bushel on Tuesday. March corn fell 0.3 percent to $3.73 a bushel.
Soybeans face pressure from expectations of bumper harvests in Brazil and Argentina which could intensify competition for US soybeans in global markets.
Brazilian industry group Abiove expects the Brazilian soybean crop now being gathered to reach 104.6 million tonnes, up almost 10 percent from last year. Analysts also expect a record large Brazilian soybean crop.
"For soybeans, weather in South America is positive with harvesting of the likely record-large soybean crop in Brazil making good progress and even looking to be faster than last year," Ammermann said. "Soybean weather in Argentina is also non-threatening."
"The strength of the Brazilian real and the Russian rouble currencies are holding back these countries from selling in export markets. Russian farmers have a lot of wheat to sell but the strong rouble is slowing export sales."
US wheat futures rallied for the fifth day in a row on Monday, hitting a 7-1/2-month high as investment funds bought despite ample global supplies.
"Wheat weather in the US also looks fine at the moment, Black Sea weather also looks reasonable and is not providing support for follow-through price rises today," Ammermann said. "For corn, Brazilian weather also looks favourable and Argentina looks competitive."
"There is also background concern about trade tension between the United States and Mexico, the largest US corn importer, and worry this could push more Mexican corn imports towards South America."
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