SYDNEY: US soybean futures tumbled to a nearly three-week low on Monday on fears of a potential fall in demand for North American supplies by China as trade war threats escalated.
Wheat fell more than 1 percent, extending a sharp slide recorded on Friday after a government report showed higher ending stocks than expected, while corn also retreated for a second straight session.
The most active soybean futures on the Chicago Board Of Trade were down 0.2 percent to $10.37-1/2 a bushel by 1145 GMT, having earlier hit a low of $10.32 a bushel - the lowest since Feb 21. Soybeans fell 2.3 percent on Friday.
"The threat of China retaliating after higher US tariffs via soybeans has became more vivid," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.
Chinese officials have said US soybeans are a prime target for retaliation against tariffs imposed by the Trump administration on steel and aluminium imports, the American Soybean Association said.
The most active wheat futures were down 1.1 percent to $4.83-3/4 a bushel, having closed down 2 percent on Friday.
The US Department of Agriculture in a monthly supply and demand report on Thursday raised its outlook for global wheat inventory at the end of 2017/18 to a record. High world supplies were countering support from drought in parts of the Plains.
The most active corn futures were down 0.5 percent to $3.88-1/2 a bushel, having closed down 0.8 percent in the previous session.
Forecasts for some rain in Argentina added to bearish sentiment although the precipitation might be too late to help some soy and corn fields in the South American nation.
Argentina's worst drought in decades and in the southern US Plains winter wheat belt helped propel prices for all three commodities to multi-month highs this month.
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