Soybeans ease after rally, market eyes Chinese demand

SINGAPORE: Chicago soybean futures edged lower on Monday, pausing after climbing to their highest since late July, with lower US yields and planting delays in Brazil limiting price declines.

Corn eased in line with soybeans, while wheat ticked higher after rallying more than two percent on Friday.

The Chicago Board Of Trade most-active soybean contract slid 0.5 percent to $9.95-1/2 a bushel by 0307 GMT, having hit its highest since July 31 on Friday at $10.03-1/4 a bushel.

Corn lost 0.4 percent to $3.51-1/2 a bushel. Wheat added 0.1 percent to $4.40 a bushel.

"The US market has been a key driver of soybean prices as the USDA reduced its yield forecast," said Phin Ziebell, agribusiness economist at National Australia Bank.

"But it has not changed the fundamental picture significantly. China has been a big buyer of soybeans. Now the question is, are they going to be buying at the same quantities at higher prices?"

A decline in China's pig herd could impact demand for soymeal, which is used as a key animal feed ingredient.

China's pig herd shrank last month at the fastest in almost two years, the country's farm ministry said on Friday, the latest sign that government steps to curb pollution have accelerated cuts in a critical farm sector.

China buys more than 60 percent of the soybeans traded worldwide.

The US Department of Agriculture (USDA) lowered its US soybean yield estimate to 49.5 bushels per acre (bpa), from 49.9 bpa in September, bucking analyst expectations for an increase.

The USDA also cut its forecast of the amount of soybeans left at the end of the 2017/18 marketing year to 430 million bushels, from 475 million a month ago.

The USDA reported on Friday export sales of US soybeans in the latest week of more than 1.7 million tonnes and corn sales at about 1.6 million tonnes, topping a range of trade expectations.

Concern about dryness in top soybean exporter Brazil, where planting is under way, is lending support to prices.

Large speculators increased their net short position in CBOT corn futures in the week to Oct. 10, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and trimmed their net short position in soybeans.