Soybeans, Corn Fall After Brazil Crop Forecast; Wheat Declines

By Madelene Pearson
March 7 (Bloomberg) -- Chicago corn and soybean futures fell in Asian trading after Brazil forecast bigger crops and on sales by some investors after both commodities reached records this week. Wheat also declined.
Brazil, the world's second-largest soybean producer, will harvest 1.9 percent more of the oilseed and 3.2 percent more corn this year than previously forecast, the nation's agriculture minister said yesterday.
Soybeans and corn are among commodities including oil and gold that rose to records this week on investor demand for a hedge against inflation as the dollar slumped to its lowest ever against the euro. The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts has gained 19 percent this year.
``They had their big run up, there's been a bit of profit taking and they are having a breather at the moment,'' Ben Barber, a broker at Bell Commodities Ltd. in Melbourne, said by phone. ``There are more gains to be made in the grains.''
Soybean futures for May delivery fell as much as 14.75 cents, or 1 percent, to $14.44 a bushel on the Chicago Board of Trade. The most-active contract stood at $14.4775 in after-hours electronic trading at 4:48 p.m. in Sydney. The commodity is heading for its biggest weekly fall since July.
Still, soybeans have surged 95 percent in the past year and reached a record $15.8625 a bushel March 3 after farmers in the U.S., the biggest producer, planted the fewest acres in 12 years.
Brazil will harvest 59.6 million metric tons this year, compared with previous estimate of 58.5 million tons, the government's crop forecasting agency said yesterday. It may harvest 55.3 million tons of corn this year, up from the previous estimate of 53.6 million tons.
Corn, Wheat
Corn futures for delivery in May fell as much as 4.5 cents, or 0.8 percent, to $5.6275 a bushel. The contract was at $5.65 at 4:50 p.m. in Sydney. Prices have gained 33 percent in the past year and reached a record $5.7425 a bushel on March 5 on demand for the grain used to make ethanol and to feed livestock.
``Raw commodities, your basic commodities, are a great hedge against inflation because that's what people eat and that is basically inflation,'' Barber said. ``You'll see the funds bring fresh money into these markets and inundate them with cash.''
Wheat futures for May delivery fell as much as 20 cents, or 1.8 percent, to $11.05 a bushel. The contract was at $11.0975 at 4:49 p.m. in Sydney. Prices have more than doubled in the past year and reached a record $13.495 on Feb. 27.
AWB Ltd. and other grain exporters fell today in Sydney trading. AWB, Australia's largest grain exporter, declined 8 cents, or 3.2 percent, to A$2.45 at the 4:10 p.m. close of trade in Sydney. ABB Grain Ltd., Australia's largest barley exporter, fell 43 cents, or 4.6 percent, to A$9.01.