Soybeans drop to 10-year low on record US crop, China demand woes

SINGAPORE: Chicago soybean futures dropped to a 10-year low on Tuesday as the harvest of a record US crop advanced rapidly amid a growing trade dispute between Washington and Beijing.

Corn slid to a three-month low on US harvest pressure, while wheat bounced back on worries over drought curbing supplies in key exporting countries.

The most-active soybean contract on the Chicago Board Of Trade added 0.2 percent to $8.24-3/4 a bushel by 0550 GMT, after earlier dropping to its weakest since 2008 at $8.19-3/4 a bushel.

Corn gained 0.1 percent at $3.48-1/4 a bushel, but was not far from the session low of $3.47-1/2 a bushel - the lowest since June 20. Wheat was up 0.4 percent at $5.08-1/2 a bushel, having closed down 0.8 percent on Wednesday.

"The soybean market has a lot of bearish news to digest," said one India-based agricultural commodities analyst. "We are expecting the USDA to further raise its yield estimates as the US crop is looking bigger."

After the market closed on Monday, the US Department of Agriculture said the soybean harvest was 6 percent complete, just above the average analyst estimate of 5 percent and ahead of the five-year average of 3 percent.

The US corn harvest was 9 percent complete, near an average of analyst estimates for 10 percent and ahead of the five-year average of 6 percent, the agency said.

The National Oilseed Processors Association said its members crushed 158.885 million bushels of soybeans in August, a figure that fell below a range of trade expectations.

Soybeans came under further pressure amid renewed hostilities in trade war between United States and China.

US President Donald Trump escalated his trade war with China on Monday, imposing 10 percent tariffs on about $200 billion worth of Chinese imports, but sparing smart watches from Apple and Fitbit and other consumer products such as bicycle helmets and baby car seats.

China's retaliatory tariffs on US soybean imports have already taken a toll on shipments of the oilseed to the world's biggest buyer.

On the technical front, the CBOT soybeans November contract may break a support at $8.19 per bushel and fall more to the next support at $8.08-3/4, according to Wang Tao, Reuters analyst for commodities and energy technicals.

In the wheat market, there were concerns over frost damage in Australia.

Possible frost damage over the weekend in Western Australia threatened to further dent a crop already diminished by drought in the east.

Commodity funds were net sellers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Monday, traders said.