* CBOT soybeans drop on signs of slowing China demand
* Soy weakness, poor demand drag corn lower
* Wheat ends firm on short covering, Egyptian tender
(Recasts, adds closing prices, adds Egypt tender)
By Mark Weinraub
CHICAGO, Dec 18 U.S. soybean futures dropped 2
percent on Tuesday, their biggest daily decline in more than a
month, due to China's decision to cancel a purchase of 300,000
tonnes of U.S. supplies, traders said.
Corn prices also fell, dragged lower by the weakness in
soybeans and low demand from end users on the domestic and
Wheat bucked the overall weakness in the grains complex,
climbing for only the second time in eight sessions as a round
of short covering hit the market when prices for the benchmark
Chicago Board of Trade March contract equaled a 5-1/2
A tender for supplies from Egypt, the world's top buyer of
wheat, added support to the wheat market.
The U.S. Agriculture Department said the soybean
cancellations also included 120,000 tonnes of supplies sold to
unknown destinations in addition to the 300,000 tonne deal that
China, the world's top buyer of soybeans, scuttled.
China's move suggested that demand for U.S. soybeans might
be slowing down from its robust pace of the past few months,
especially with harvest of the South American crop starting
"I am a little surprised but let's look at it in the bigger
scope," said Mark Schultz. "I was even more surprised that they
bought as much as they did earlier. It is still a big number,
even with the cancellations. We are a little bit surprised just
because of where the price of beans are still at in China."
CBOT January soybean futures settled down 30-1/4 cents
at $14.66 a bushel. Prices fell through key technical support
points at the contract's 50-day and 200-day moving averages
during the session. It was the front-month soybean contract's
biggest drop in percentage terms since falling 2.1 percent on
CBOT March corn was 4 cents lower at $7.20 a bushel.
CBOT March wheat gained 3-1/4 cents to $8.11-1/4 a bushel,
settling above its 200-day moving average after hovering near
that key technical level for much of the session.
Egypt's main wheat-buying agency, the General Authority for
Supply Commodities (GASC), set a tender on Tuesday to buy an
unspecified amount of wheat from global suppliers for shipment
Feb. 11-20. As part of the tender, GASC is seeking cargoes of
55,000 to 60,000 tonnes of different kinds of wheat, including
two different classes of U.S. supplies.
Two major winter storms systems are set to sweep through
much of the U.S. Plains and Midwest over the next two weeks
leaving welcome soil moisture, said Don Keeney, agricultural
meteorologist for MDA EarthSat Weather.
Snowfall ranging from 2 to 4 inches could be expected
accompanied by some rain in this week's storm and an even bigger
storm is expected next week.
"The six- to 10-day outlook is even more intense with 12.00
to 18.00 inches of snow in eastern Nebraska, Kansas and the
northern Midwest," Keeney said.
January milling wheat in Paris was off 1.25 euros or
0.5 percent at 256.50 euros, with a firmer euro against the
dollar adding to downward pressure.
One European trader said there was a growing belief that
prices in Paris were not reflecting the good export outlook with
Russia and Ukraine out of the market and "now there is a growing
belief that poor harvest weather will also compel Argentina to
cut back on exports, too."
Soybeans fell despite concerns over production shortfalls in
South America, with further unfavorable weather forecast.
Widespread rainfall moved across Argentina over the weekend
causing another slowdown in crop seedings and the rain is
expected to continue through Wednesday, Global Weather
Analysts remain concerned the window in which soybeans must
be planted to avoid yield losses is closing, further tightening
Estimates for the country's 2012/13 soy harvest, which
should start in March, vary wildly. Government officials have
said they expect a crop of 55 million tonnes or more while
worst-case private estimates reach down to 45 million tonnes.
Prices at 2:39 p.m. CST (2039 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 720.00 -4.00 -0.6% 11.4%
CBOT soy 1466.00 -30.25 -2.0% 22.3%
CBOT meal 444.90 -10.50 -2.3% 43.8%
CBOT soyoil 49.17 -0.62 -1.3% -5.6%
CBOT wheat 811.25 3.25 0.4% 24.3%
CBOT rice 1515.50 -5.00 -0.3% 3.8%
EU wheat 255.25 -2.50 -1.0% 26.0%
US crude 87.90 0.70 0.8% -11.1%
Dow Jones 13,331 96 0.7% 9.1%
Gold 1670.55 -27.10 -1.6% 6.8%
Euro/dollar 1.3222 0.0058 0.4% 2.1%
Dollar Index 79.3500 -0.2180 -0.3% -1.0%
Baltic Freight 743 -23 -3.0% -57.2%
In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel,
rice per hundredweight, soymeal per ton and soyoil per lb.
(Additional reporting by Sam Nelson in Chicago, Nigel Hunt in
London, Colin Packham in Sydney and Michael Hogan in Hamburg;
Editing by Chizu Nomiyama, Grant McCool and Phil Berlowitz)