SINGAPORE: US soy slid 0.7 percent on Thursday, snapping five straight sessions of gains as broad weakness in global markets, fed by doubts over funding of European banks, weighed on agricultural futures.
Corn and wheat lost ground as the grain markets slid from multi-week highs even though concerns persist that dry weather will hurt yields in South America.
Asian shares and the euro eased as doubts remained over how much of the funds banks raised from an inaugural long-term European Central Bank tender will actually flow into struggling euro zone economies and help restore confidence.
"The euro is under pressure on concerns over the European situation, which is having some negative impact on the agricultural markets," said Ker Chung Yang at Phillip Futures in Singapore.
"Fundamentally, the main story is poor weather in South America, which is likely to support soybean and vegetable oil markets."
Chicago Board of Trade January soybeans fell 0.7 percent to $11.45-1/2 a bushel by 0323 GMT. Wheat for March delivery lost 0.2 percent to $6.15-3/4 a bushel and March corn slid 0.4 percent to $6.14-1/4 a bushel.
The euro was on the defensive against the dollar on Thursday, having shed all the week's gains as investors doubted the ECB's massive 489 billion euro tender would solve Europe's debt crisis.
The market also awaits the US Department of Agriculture's export sales report later on Thursday for price direction.
Rain expected in parts of Brazil and Argentina later this week and over the weekend may not be enough, forecasters say.
Rain on Wednesday night seems to have favoured the northeastern half of Argentina's crop belt, said Joel Widenor, a meteorologist with the Commodity Weather Group.
Brazil will not see much rain until the end of the week, with central and northern areas getting most of the rain next week, he said.
Still, production prospects in other parts of Brazil look robust.
Producers in the largest soy producing state, Mato Grosso, are days away from beginning the harvest of record corn and soy crops, while tenacious dry weather elsewhere in Brazil's grain belt threatens to hurt yields.
China, the world's top soy buyer, imported 34.8 percent less of the oilseed from the United States in November on the year, as South American supplies cut into the US share of China's huge market, Chinese customs data showed on Wednesday.
China imported a total of 5.69 million tonnes in November, the second highest monthly import level ever. Crushers increased imports to replenish low stocks at home as crush margins rose.
CBOT trading volumes have tapered off dramatically this week ahead of the holidays, with corn and wheat falling to less than half of their usual activity for the past month.
Past the holiday period, the Jan. 12 US Department of Agriculture supply/demand and stocks report and the euro zone debt crisis are likely to influence prices.
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