December 22, 2017 / 2:57 AM / 3 months ago

GRAINS-Soybean prices drop to 3-mth low as S.American rains boost crops

    * Expectations of bumper S.American output pressure soybean
    * Wheat set for biggest weekly gain in three months

 (Adds comment, detail)
    By Naveen Thukral
    SINGAPORE, Dec 22 (Reuters) - Chicago soybean futures on
Friday fell for a seventh session, hitting a three-month low as
improved weather across Brazil and Argentina boosted
expectations for another bumper harvest in South America.
    Wheat prices were little changed after rallying for the past
two sessions on the back of higher demand for U.S. shipments.
    The soybean market is being dragged down by rains in
Argentina's drought-hit producing regions and forecasts of
all-time high output in Brazil.
    Increased soybean production in South America is expected to
stoke competition in the global market, with U.S. exports
already running behind last year's pace.
    The Chicago Board of Trade's most-active soybean contract
 is on track for a third week of decline, down more than 2
percent this week. The market earlier in the session dropped to
its lowest since Sept. 12 at $9.46-1/2 a bushel. 
    Corn is up about 1 percent this week after falling for
the past two weeks, while wheat has risen 2.2 percent this
week in its biggest weekly gain since mid-September.
    More stringent specifications for U.S. soybean imports in
China, the top global buyer, are adding to the bearish headwinds
for soybeans. 
    U.S. shipments to China as of Jan. 1 will be required to
have reduced foreign material content to expedite unloadings,
the U.S. Department of Agriculture said on Wednesday.

    "The market is under pressure because of improved weather in
South America, but I think downside is limited for soybeans as
the market is unlikely to remain below $10 a bushel," said Ole
Houe, an analyst with brokerage IKON Commodities in Sydney.
    "I will be surprised to see if prices fall sharply from
    Higher-than-expected demand for U.S. wheat is supporting
    The USDA on Thursday said weekly U.S. export sales of
796,300 tonnes of wheat and 1.6 million tonnes of corn were
higher than analyst expectations, while sales of 1.7 million
tonnes of soybeans were at the high-end of estimates.
    U.S. export sales of a certain type of wheat were the
biggest in more than three years, the USDA said on Thursday, as
low prices prompted livestock producers in Asia to buy the grain
as animal feed.
    Soft red winter wheat, the variety traded on the CBOT, is
usually used to make flour for cookies and crackers. However,
prices for lower-grade supplies declined enough to make it a
bargain for poultry and livestock farmers, U.S. and European
export traders said.
    Commodity funds were net buyers of CBOT corn and wheat
futures contracts on Thursday and net sellers of soybeans,
soyoil and soymeal, traders said.
 Grains prices at  0233 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  426.50  -0.50    -0.12%   +1.67%       431.36  72
 CBOT corn   351.00  -0.25    -0.07%   +1.01%       352.84  75
 CBOT soy    946.50  -2.25    -0.24%   -0.99%       982.19  19
 CBOT rice   11.86   -$0.14   -1.13%   +1.24%       $12.05  50
 WTI crude   58.15   -$0.21   -0.36%   +0.10%       $57.19  60
 Euro/dlr    $1.185  -$0.002  -0.21%   -0.18%               
 USD/AUD     0.7715  0.002    +0.19%   +0.64%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral; Editing by Joseph Radford)
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