SINGAPORE: US soybean futures lost more ground on Thursday, falling for a fourth straight day, while corn and wheat slid amid a selloff in the commodity markets triggered by mounting worries over the euro zone debt crisis.
Seasonal harvest pressure in the United States and improved planting weather in South America added pressure on soybean and corn values.
"Euro zone crisis does remain a key concern for the financial markets and there are murmurs that the Chinese economy could be facing some headwind," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney.
"Both of those factors are having significant influence on grains and oilseeds."
Chicago Board of Trade December corn fell 0.8 percent to $6.33-1/4 a bushel by 0309 GMT and December wheat was down 0.7 percent to $6.15-1/4 a bushel. November soy lost 1.1 percent to $12.12 a bushel. Soy prices dropped to $12.06-3/4 earlier in the session, lowest since October 11.
Asian stocks fell on Thursday, as growing investor caution about taking risks ahead of a key European leaders' summit at the weekend weighed on riskier assets across the board and supported safe-haven government bonds.
The euro struggled to make much headway, having pared gains on fresh reports suggesting Europe remains a long way from resolving its debt woes.
In addition, the financial markets are getting worried about growth in the world's top soybean importer China, where economic expansion slowed in the third quarter to its weakest pace since early 2009.
China's GDP grew 9.1 percent from a year earlier, the third consecutive quarterly slowdown in growth after 9.5 percent in the second quarter and 9.7 percent in the first.
On the fundamental side, corn and soybean futures faced pressure from rapid harvest in the United States although slow selling by farmers in anticipation of higher prices provided a floor under the markets.
"There is harvest pressure out of the United States for both corn and soybeans," said Mathews.
"In South America, concerns were starting to pick up regarding the possible impact of La Nina but those concerns have dissipated with some rains over the last couple of weeks and now producers are facing quite favourable conditions for the summer crop planting."
Brazil's soy planting has picked up over the grain belt in the past week, with producers sowing 10 percent of the expected soy area by Oct. 14, up from 5 percent the week before and on par with last year this time, analysts Celeres said on Monday.
The US Department of Agriculture late Monday said 47 percent of the corn crop had been harvested, up from 33 percent a week ago and ahead of the 41 percent five-year average pace.
Still, spot basis bids for US corn and soybeans were steady to higher around the US Midwest on Wednesday as farmers delayed sales of each crop and put freshly harvested supplies into storage bins, grain merchants said.
US farmers are eyeing higher prices seen earlier this year. CBOT wheat prices are 31 percent below the highs for 2011 set in February, corn is down about 20 percent from its record high of $7.99-3/4 set on June 10 and soybean prices are down 17 percent from the 2011 high set in August.
Copyright Reuters, 2011
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