U.S. wheat, corn and soybeans fell on Thursday, reversing recent gains as investor focus returned to large supplies following good harvests among major producers.
The Chicago Board of Trade front-month March wheat contract fell 0.5 percent to $4.66 a bushel by 1110 GMT. March corn slipped 0.2 percent to $3.66-1/2 a bushel and March soybeans also dropped 0.2 percent, to $8.80-1/4 a bushel.
"Prices for wheat, corn and soybeans are lower today as market attention is returning to fundamental factors, and these involve large crops and potentially ample supplies," said Frank Rijkers, agrifood economist at ABN AMRO Bank. "This fall follows a bounce in past days partly driven by short covering and firmer crude oil."
"The overall global supply outlook for wheat is for large crops in a series of key regions meeting slow demand, with supplies possibly looking burdensome."
Chicago wheat futures dropped to their lowest level since 2010 on Feb. 9 after the U.S. Department of Agriculture estimated year-end global supplies would be the biggest ever and also forecast record high world wheat harvests.
Wheat import demand is also weak, with the fall in crude oil prices in past months cutting spending power in many Middle Eastern countries and a dispute about whether imports should contain the fungus ergot disrupting shipments to Egypt, the world's biggest wheat importer.
Quality inspectors from Egypt's agriculture ministry have in past weeks rejected wheat imports containing ergot but the ministry said in a letter on Wednesday it would in future permit a trace level of the fungus.
However, following conflicting statements about the problem this year traders cautioned they wanted to see if the Egyptian ministry now actually introduces a tolerance level for wheat waiting to unload in the country.
"There is a lot of attention on the position with Egyptian wheat imports after the quality control issues, with some progress but not an immediate end to the Egyptian wheat problems reported," Rijkers said.
Mostly good South American weather underlined expectations of hefty soybean crops from Brazil and Argentina along with decent corn harvests which are now arriving on world markets as harvests gather speed.
"Fundamental factors for soybeans and corn are also bearish, with good harvests approaching in South America with overall crop weather remaining positive in Brazil and Argentina," Rijkers said. "Today this is overriding concern about backlogs for loadings of ships with soybeans and corn in Brazilian ports seen earlier this week."