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GRAINS-Soybeans face 2nd week of decline as large S.America supply looms
December 9, 2016 / 4:52 AM / a year ago

GRAINS-Soybeans face 2nd week of decline as large S.America supply looms

* Soybeans lower on outlook for record Brazil, Argentina
crops
    * India to boost wheat shipments after abolishing import
duty

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Dec 9 (Reuters) - Chicago soybean futures lost
more ground on Friday, with the market set for a second week of
losses as an improving outlook for weather in Argentina boosted
hopes for another year of bumper supplies.
    Wheat edged lower but the market is set to end the week on a
positive note on expectations of strong demand from India, which
scrapped an import duty on Thursday to boost purchases.
    The Chicago Board of Trade most-active soybean contract
 is down 0.3 percent this week after dropping 1.8 percent
last week. Wheat has risen 0.5 percent this week after
dropping 3.6 percent last week. 
    Corn is on track for a 2 percent rise and a gain for
three out of four weeks. 
    "The main factor which was driving (soybean) prices higher
was strong Chinese demand but if you look at the estimates no
one has increased their outlook for China's annual purchases," 
said Rajesh Singla, head of agriculture research at Societe
Generale. 
    "Overall there are forecasts of record production in Brazil
which means supplies will be ample next year." 
    Strong Chinese demand lifted soybean prices last week to
their highest in more than four months, but the market
subsequently became weighed down by the prospects of record
production in South America. 
    Dry parts of Argentina may see rains within the next two
weeks, meteorologists said, buoying hopes of record production
in 2017. Brazil's government crop supply agency estimated the
country's soy harvest at a record 102.45 million tonnes.
 
    The U.S. Department of Agriculture in its monthly
supply-demand report on Friday is expected to boost supply
expectations for Brazil and Argentina soybean production and
narrowly reduce U.S. ending stocks, according to a Reuters'
analyst poll. 
    Also, U.S. President-elect Donald Trump's nomination of
Oklahoma Attorney General Scott Pruitt to run the nation's
Environmental Protection Agency sparked worries of reduced
demand for corn-based ethanol and soy-based biodiesel. 
    The wheat market is being underpinned by India's move to
scrap its 10 percent import duty on wheat after droughts in the
past two years depleted domestic stocks and raised prices. The
move is likely to lift the nation's overseas purchases to their
highest in a decade. 
    India has been snapping up wheat cargoes from Australia and
Ukraine in recent months with purchases since June estimated at
about 1.5 million tonnes. 
    Commodity funds were net sellers of CBOT soybean and corn
futures contracts on Thursday and net buyers of wheat, traders
said. 
    Trader estimates of net fund selling in soybeans ranged from
14,000 to 15,000 contracts, and corn from 6,000 to 12,000
contracts. Estimates of net fund buying in wheat ranged from
4,000 to 4,500 contracts. 
    
 Grains prices at  0348 GMT
 
 Contract     Last     Change   Pct chg  Two-day chg  MA 30    RSI
 CBOT wheat   406.25   -2.00    -0.49%   -0.12%       422.39   48
 CBOT corn    354.25   0.75     +0.21%   -1.73%       356.38   55
 CBOT soy     1024.75  -2.25    -0.22%   -2.20%       1013.91  45
 CBOT rice    9.77     $0.00    +0.00%   -1.91%       $9.76    50
 WTI crude    50.91    $0.07    +0.14%   +2.29%       $47.12   61
 Currencies                                                    
 Euro/dlr     $1.060   -$0.012  -1.08%   -1.50%                
 USD/AUD      0.7453   -0.001   -0.09%   -0.25%                
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential
 
 (Reporting by Naveen Thukral; Editing by Joseph Radford and Tom
Hogue)

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