Soybeans, wheat, corn fall as attention turns to large supplies
HAMBURG, March 23 (Reuters) - Chicago soybeans fell on Wednesday, retreating from five-month highs reached on Tuesday, as the market focus returned to large global supplies.
Wheat and corn also dropped alongside the weakness in soybeans and ahead of the U.S. government's sowings report next week.
"Soybeans are seeing a pullback today after their recent strong rises to five-month highs, with some market participants assessing that soybean prices are too high in view of the fundamental background of large supplies with a bumper crop in South America," Frank Rijkers, agrifood economist at ABN AMRO Bank, said.
"Wheat and corn are seeing some spillover weakness from soybeans, although losses in wheat are being limited by concern about poor crop weather in the U.S. Plains wheat belt."
Chicago Board of Trade May soybeans fell 0.5 percent to $9.05-1/2 a bushel at 1129 GMT, retreating from last session's peak of $9.14 a bushel, the highest on a continuous chart since Oct. 15.
May wheat fell 0.5 percent to $4.64-1/4 a bushel and May corn dropped 0.6 percent to $3.67-3/4 a bushel.
Falling oil prices and an export-punishing rise in the U.S. dollar also depressed sentiment.
"Soybeans had received some technical support in past days from technical factors and firm palm oil prices, but more selling pressure is being seen today," Rijkers said.
Wheat prices this week were supported by freezing temperatures over the weekend in the U.S. Plains grain belt, where developing plants may have been damaged. The scale of the damage is not likely to become clear for some weeks.
"Wheat is also being weakened by the outlook for large global supplies after bumper crops, with news this week that European Union crops are generally coming through the winter in good shape," Rijkers said.
"Corn is not seeing specific major new factors, but Argentina is active in export sales."
Market attention is also turning towards the U.S. planted area forecasts and quarterly grain stocks estimates from the U.S. Department of Agriculture on March 31. The reports could inject volatility into markets generally burdened by record-large global grain stocks.
"Early trade talk is for a larger corn and soybean plantings," Paul Georgy of research and brokerage firm Allendale Inc. said in a note.