Soybeans face biggest yearly loss in decade on supply swing

PARIS/SINGAPORE: Chicago soybean futures were set to end 2014 with their biggest loss in a decade as bumper production in the United States and South America replenished global supply of the protein-rich oilseed.

Corn and wheat were also poised to post an annual decline against a background of ample worldwide supply, but a fourth-quarter rebound prompted by concerns over Russian wheat exports and strong corn demand limited full-year losses.

Trading on Wednesday was light as the year-end period kept some operators away from their desks and encouraged others to make small adjustments to their books.

Chicago grain markets will be closed on Thursday for the New Year holiday, while European markets will close early on Wednesday.

Chicago Board of Trade January soybeans edged down 0.2 percent to $10.35-1/2 a bushel by 1246 GMT. March wheat also inched down 0.2 percent, to $6.01 a bushel, while March corn eased 0.4 percent to $4.04-3/4.

Over the year, spot soybean prices fell 21 percent, compared with a 4 percent decline for corn and a 0.7 percent drop for wheat.

All three markets hit multi-year lows at the end of September before recovering sharply in the final quarter as robust demand, supply snags in the U.S. soybean market and uncertainty over export policy in Russia fuelled a wave of fund buying.

"Soybean supply is not tight like last year so it's logical for prices to be lower," Gautier Le Molgat of French consultancy Agritel said. "But the world still needs a lot protein. $10 is still not bad prices for soybean and more attractive than corn."

Soybean prices could come under pressure early next year if prospects for the upcoming South American soy crop continue to improve after favourable growing weather. One closely followed crop scout raised his Brazilian soy crop outlook by 1 million tonnes this week, traders said.

U.S. corn exports have helped the market recover in recent weeks. Export sales in the week ended Dec. 18 hit a 10-week high of 1.7 million tonnes, above trade forecasts for 500,000 to 800,000 tonnes.

Large speculators raised their net long position in CBOT corn futures in the week to Dec. 23, regulatory data released on Tuesday showed.

Wheat prices were easing back after racing higher earlier this month in the run-up to the announcement by Russia, the world's fourth largest wheat exporter, that it would introduce export duties from Feb. 1, to stabilise domestic prices.