Soybeans at 3-month low on Brazil rain, China demand doubts

January 20th, 2015

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Category: Grains, Oilseeds

soybean field & blue sky 450x299(Reuters) – U.S. soybeans slipped to the lowest in almost three months on Tuesday, sapped by worries about weakening Chinese demand and forecast rain that could keep Brazil on course for a record crop.

Corn eased, giving up some of its export-fuelled gains in the previous session, as lower crude oil and a firm dollar weighed on sentiment. Wheat inched lower to stay close to a two-month low against a backdrop of lacklustre export demand.

Chicago Board Of Trade futures resumed trading after a holiday closure on Monday for Martin Luther King Jr. Day.

Chicago Board of Trade March soybeans fell 0.8 percent to $9.84-1/4 a bushel by 1027 GMT. It earlier fell to $9.81-1/4, touching its lowest since Oct. 27 for the second straight session.

March corn fell 0.9 percent to $3.83-1/2 a bushel, having gained 1.8 percent in the previous session. March wheat ticked down 0.1 percent to $5.32 a bushel, near Thursday’s low of $5.28 a bushel, its weakest since Nov. 11.

“The picture is one of abundant supply and you overlay that on the top of falling oil prices and the effect that it is having on the ethanol market,” Phin Ziebell, agribusiness economist, National Australia Bank, said, referring to soybeans and corn.

In Brazil, the main crop areas will see a cold weather front arrive by Thursday followed by rainfall, meteorologists said on Monday, suggesting relief for parched soybean crops as harvesting gets under way.

“The only real news (on Monday) came from Brazil … and this is good news for crops as it should limit risks related to the recent dry spell,” French consultancy ODA said in a note.

The soybean market was also curbed by uncertainty over demand from China, the world’s top buyer of the oilseed.

The first large U.S. soybean export sale cancellation of the season by China, coming a month earlier than last year, has sparked market concern that the recent record pace of U.S. exports was fast drawing to a close.

Financial markets are also fretting about slowing Chinese growth, even if investors welcomed an estimate of 2014 growth in China as better than feared.

A cut by the International Monetary Fund to its forecast for global growth in 2015 kept attention on economic headwinds and pushed crude oil lower.

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