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U.S. grains: Soybeans retreat from multi-month highs

Corn, wheat turn lower, retreating from early strength

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean and corn futures declined on Wednesday in a light profit-taking setback, one day after bullish soy stocks data in a monthly U.S. government report sent soybeans soaring to the highest levels since 2014.

Wheat also sagged, pressured by plentiful global supplies and the approach of the U.S. harvest.

At the Chicago Board of Trade, July soybeans settled down 5-3/4 cents at $10.78-1/4 per bushel (all figures US$). July corn fell 3-1/2 cents to $3.77-1/2 a bushel and July wheat ended down 2-1/4 cents at $4.59 a bushel.

Soybeans retreated after follow-through buying from Tuesday’s surge lifted the lightly traded May contract, which is in delivery, to $10.82-1/4, the highest spot price since November 2014.

Most-active July soybeans turned lower after failing to match a 21-month high set Tuesday at $10.91-1/2.

“It’s just some back-filling here, with the big rally yesterday,” Dan Cekander, president of DC Analysis, said of the market.

Farmer soybean sales added pressure, a factor reflected in softening cash basis bids posted at several Midwest soy processing sites.

Soybean futures exploded higher on Tuesday, with some contracts briefly rising the 65-cent daily limit, after the U.S. Department of Agriculture’s May supply/demand report projected lower-than-expected U.S. soy ending stocks for the 2015-16 and 2016-17 marketing years.

The CBOT expanded the daily trading limits for soy products for Wednesday’s session, but trade was far more subdued.

Like soybeans, corn and wheat sagged on Wednesday, retreating from early advances.

“Weakness in corn and wheat prices speaks more to the poor fundamentals for those two grains, which struggle to sustain gains in the absence of strength in the soybean complex,” INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.

USDA on Tuesday projected that U.S. inventories of both corn and wheat would rise by the end of the 2016-17 marketing year to levels not seen since the 1980s.

The government also on Tuesday estimated the U.S. winter wheat production at 1.427 billion bushels, above an average of trade estimates. Harvest of that crop could begin by the end of the month.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral.

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