imageCHICAGO: US soybean futures fell 1.5 percent on Wednesday, retreating from a three-week high notched Tuesday as the dollar rose, traders said. Outlooks for the driest areas of Brazil’s crop region calling for rain this week and the falling crude oil market also hurt soy prices.

“Today, cooler heads prevailed and we’re seeing a correction, the move in beans was especially overdone,” said Joe Lardy, a grains analyst with CHS Inc, the largest US farm co-op.

“There wasn’t a good fundamental reason behind Tuesday’s rally.” Chicago corn and wheat were also lower after both jumped 4 percent on Tuesday.

“I’m surprised the wheat markets aren’t down a little more given that we’re not competitive in world business,” said Lardy, noting the United States continues to miss out on global tenders as US wheat is running $ 20 to $ 30 per tonne higher than European wheat. Saudi Arabia, Egypt, Iraq, Jordan, Bangladesh and South Korea have all purchased or tendered for wheat this week.

“Wheat is being underpinned by the stronger global demand seen after wheat dropped to four-month lows earlier in the week,” Frank Rijkers, agrifood economist at ABN AMRO Bank. Statistics Canada also released its Dec. 31 stocks data on Wednesday, which landed within traders’ expectations. Stats Canada said all-wheat stocks were 24.8 million tonnes, the second-largest in 18 years.

Canola supplies totalled 11.1 million tonnes, the second-highest ever, and soybean stocks jumped 29.4 percent to a record 3.5 million tonnes.

Chicago Board of Trade March soybeans closed down 15 cents, or 1.5 percent, at $ 9.72 a bushel. Chicago wheat ended at $ 5.11, down 2-3/4 cents or 0.5 percent, while March corn was at $ 3.83-1/2, down 2-1/4 cents or 0.6 percent.

Brian Basting, an economist with Advance Trading, said the weekly US Energy Information Administration ethanol grind numbers were a “little negative” for corn while forecasts for the parched northeastern region of Brazil to see beneficial rains later this week pressured soybeans.

EIA showed a weekly drop in corn ethanol production of 30,000 barrels per day to 948,000 bpd, the lowest production since the first week of November 2014.

Copyright Reuters, 2015