US soy slips to 10-month low on economic concerns

SINGAPORE: US soybean futures fell 0.3 percent on Thursday to a new 10-month low, while wheat and corn lost more ground after sliding more than 3 percent in the previous session as concerns over Europe's debt crisis weighed on the commodity markets.

FUNDAMENTALS

On Wednesday, corn fell 3 percent to nearly a three-month low, while soybeans suffered the biggest fall in six months with losses accelerating in tandem with declines in gold, crude oil and equities and on forecasts for drier US harvest weather.

Seasonal harvest pressure increased on the corn and soybean markets as weather in the eastern US Midwest is expected to turn dry late this week.

Wet weather in the eastern Midwest had been slowing the drydown of mature crops and delaying harvest.

Traders were also positioning before the US Department of Agriculture's quarterly grain stocks report on Friday, and an accompanying report on US wheat production.

US corn stockpiles likely declined over the summer but by slightly less than the government has estimated, giving the tight market marginally more breathing room before consumers enter an even leaner year.

Inventories at the end of the 2010/11 marketing year are expected to fall to 964 million bushels, down 44 percent from 1.708 billion a year ago and the smallest supply in eight years, according to analysts polled by Reuters ahead of the quarterly stock report.

The market will be closely watching Egypt's tender to buy an unspecified amount of wheat from global suppliers for Dec. 21-31 shipment.

MARKET NEWS

The euro fell on Wednesday as investors pared long positions after a three-day advance against the dollar sparked by optimism Greece's lenders will allocate the funds to avoid default on its debt.

Brent crude resumed its downward trend on Wednesday, falling 3 percent as Europe's debt crisis continued to worry markets, while a larger-than-expected build in weekly US crude oil inventories also weighed.

Commodity-related stocks drove Wall Street lower on Wednesday as stiff declines in energy and metals prices underscored investor concerns about global economic weakness and Europe's raging debt crisis.

Copyright Reuters, 2011