CHICAGO—U.S. wheat, soy and corn futures fell on Tuesday in sympathy with declines in other commodity markets, including crude oil and gold, traders said.
U.S. crude oil futures were down more than 2 percent on the New York Mercantile Exchange, with December down more than $2 at $91.50 a barrel, after reaching an all-time high near $94 on Monday.
The biggest declines at the Chicago Board of Trade were in wheat, with December down nearly 2 percent, falling 15-1/2 cents to $8.13 per bushel by 12:15 p.m. CDT (1715 GMT).
November soybeans were down 16-1/2 cents, or 1.6 percent, at $9.94-1/2 per bushel. December corn was down 6 cents, or 1.6 percent, at $3.70 a bushel.
Traders were booking profits after the December wheat contract climbed its 30-cent limit on Monday on export rumors, a weak U.S. dollar and a surge in crude oil prices.
Grain analysts also cited a research note from investment bank Goldman Sachs on Tuesday that recommended closing long positions in oil, gold and agriculture commodities.
"We ... are closing our long WTI (oil) and long agriculture and gold positions. We are not trying to call a top here, just take profits from a tactical perspective, as prices could continue to rise in the coming weeks," Goldman said.
"I think that's a down day in the making," grains analyst Roy Huckabay in Chicago said of the Goldman note. "This is a Goldman Sachs liquidation day."
Kansas City Board of Trade December wheat was down 18 cents at $8.36-1/4 per bushel and Minneapolis Grain Exchange December spring wheat was down 20 at $8.36.
Wheat futures fell despite news that the Australian government lowered its forecast for Australia's wheat crop to 12.1 million tonnes, from a previous estimate of 15.5 million.
Analysts said the cut was expected, and the crop size was not expected to drop much more -- unless rains start to disrupt the Australian harvest.
"If they get into harvest delays because of rain, that would be interesting. But otherwise, we've traded all that," said Fimat USA analyst Dan Cekander in Chicago.
CBOT soybeans and soy products, which track the energy markets, given the increased amount of vegoils used to produce biodiesel, also declined, reflecting eased crude prices.
Soyoil futures were backing down after soaring to near 33-year highs on Monday.
"All the outside markets, including crude and the dollar, are driving grain markets. They will remain volatile for a while," said a Seoul-based trader.
Corn futures had additional pressure from the harvest of a bumper U.S. crop, and on ideas the U.S. Department of Agriculture might raise its estimates of 2007 U.S. corn production and yields in its November crop reports next week.
"I think there are some jitters ahead of these crop estimates coming out, with some private numbers coming out later this week," Cekander said.
"Certainly, not everyone agreed with USDA's numbers in October on corn and beans. If you're long, you may have to survive some numbers bigger than USDA's. That might be causing some profit-taking here."
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