CHICAGO: US soybean futures dropped to contract lows on Wednesday as an escalating trade war with China stoked worries about long-term export demand from the world's top importer of the oilseed.
Favorable crop weather in the US Midwest weighed on soybeans and corn, which also hit contract lows, on expectations for bumper harvests this season.
Wheat slumped for a third straight day, following corn and soy lower and as stiff global competition dented demand for US shipments.
Worries about rising trade tensions with China hung over markets in general after Washington detailed products to be covered by a 10 percent tariff on an extra $200 billion worth of Chinese imports. China has vowed to strike back.
The hardening standoff has put particular pressure on soybeans, the most valuable US agricultural export to China, which bought more than $12 billion of US soybeans last year.
The president of state grains trader COFCO was quoted on Wednesday as saying China could reduce reliance on US soybeans by increasing imports of soybeans from other countries, or other oilseeds, or meat directly.
"In the short-run, China's probably not going to be able to take too much of their business away from the US, and what they do likely will get displaced. But in the long run, this is giving them more incentive to develop other channels," said Ted Seifried, analyst with Zaner Ag Hedge.
Chicago Board of Trade August soybean futures fell 19 cents, of 2.2 percent, to $8.36-3/4 a bushel by 12:39 p.m. CDT (1739 GMT) after notching a contract low of $8.35-1/2. July 2018 through May 2019 all set new life-of-contract lows.
CBOT September corn touched a contract low of $3.40-1/2 a bushel and were down 6-1/2 cents, or 1.9 percent, at $3.41-1/4 a bushel. July 2018 through September 2019 contracts all hit fresh lows.
Forecasts for a favorable mix of rain and moderate heat in the week ahead in the US Midwest has underscored the prospect of a bumper corn harvest and bolstered expectations that the US Department of Agriculture (USDA) will raise its production forecast in a monthly crop report on Thursday.
CBOT September wheat futures fell 16 cents, or 3.3 percent, to $4.76 a bushel.
Generally favorable growing conditions for US spring wheat anchored wheat prices, along with easing concern about global supplies.
France's farm office FranceAgriMer said on Tuesday the country had bigger wheat stocks than expected.
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