Soybeans slip to five-month low on supply outlook

PARIS/SINGAPORE: Chicago soybeans fell for a second session in row on Thursday, hitting a five-month low as expectations of an increase in US plantings and a bumper South American crop weighed on the market.

Corn and wheat also inched lower, pressured by a one-week high for the dollar, as investors squared positions ahead of a key US Department of Agriculture (USDA) crop report on Friday.

The Chicago Board of Trade's most-active soybean contract was down 0.4 percent at $9.65-1/2 a bushel by 1120 GMT. It earlier slipped to $9.64, its lowest since Oct. 17.

"Soybeans stayed under pressure with the prospect of a record acreage in the United States and an abundant harvest on the South American continent," consultancy Agritel said in a note.

Forecasters have steadily increased their estimates for South American soybean production in recent weeks, including an expected record harvest in Brazil.

Friday's USDA planting and stocks reports could increase supply pressure by showing a jump in the US soybean planted area and a rise in soybean, corn and wheat inventories.

"Investors are squaring things away before the USDA report," said Phin Ziebell, agribusiness economist at National Australia Bank.

"When you look at the data that has come out in the last one month, there are plenty of supplies. The market is expecting to confirm this from the USDA tomorrow."

There was also concern that Chinese demand for soybeans may slow after crush margins for imported soybeans in China's Shandong province slid to negative 166 yuan, the lowest since August.

Corn was down 0.3 percent at $3.57-1/2 a bushel and wheat gave up 0.2 percent to trade at $4.24-3/4 a bushel.

Chinese corn futures on the Dalian Commodity Exchange fell for a second day on Thursday amid rumours Beijing will release grain from its vast state reserve earlier than scheduled and at lower than expected prices.

Forecasts of crop-friendly rainfall in the southern US Plains wheat belt have weighed on wheat futures so far this week, outweighing support from a series of tenders from importers.

Grain markets will get a fresh indication of demand in weekly US export sales figures at 1230 GMT.