October 16, 2017 / 3:41 AM / a year ago

GRAINS-Soybeans ease after rally, market eyes Chinese demand

    * Soybeans edged lower after rising to highest since July 31
    * Lower U.S. yields, Brazil planting delays limit decline
    * Soybeans to seek direction from demand in top buyer China

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Oct 16 (Reuters) - Chicago soybean futures edged
lower on Monday, pausing after climbing to their highest since
late July, with lower U.S. yields and planting delays in Brazil
limiting price declines. 
    Corn eased in line with soybeans, while wheat ticked higher
after rallying more than two percent on Friday. 
    The Chicago Board Of Trade most-active soybean contract
 slid 0.5 percent to $9.95-1/2 a bushel by 0307 GMT, having
hit its highest since July 31 on Friday at $10.03-1/4 a bushel. 
    Corn lost 0.4 percent to $3.51-1/2 a bushel. Wheat
 added 0.1 percent to $4.40 a bushel. 
    "The U.S. market has been a key driver of soybean prices as 
the USDA reduced its yield forecast," said Phin Ziebell,
agribusiness economist at National Australia Bank. 
    "But it has not changed the fundamental picture
significantly. China has been a big buyer of soybeans. Now the
question is, are they going to be buying at the same quantities
at higher prices?" 
    A decline in China's pig herd could impact demand for
soymeal, which is used as a key animal feed ingredient. 
    China's pig herd shrank last month at the fastest in almost
two years, the country's farm ministry said on Friday, the
latest sign that government steps to curb pollution have
accelerated cuts in a critical farm sector.
    China buys more than 60 percent of the soybeans traded
    The U.S. Department of Agriculture (USDA) lowered its U.S.
soybean yield estimate to 49.5 bushels per acre (bpa), from 49.9
bpa in September, bucking analyst expectations for an increase.

    The USDA also cut its forecast of the amount of soybeans
left at the end of the 2017/18 marketing year to 430 million
bushels, from 475 million a month ago. 
    The USDA reported on Friday export sales of U.S. soybeans in
the latest week of more than 1.7 million tonnes and corn sales
at about 1.6 million tonnes, topping a range of trade
    Concern about dryness in top soybean exporter Brazil, where
planting is under way, is lending support to prices.
    Large speculators increased their net short position in CBOT
corn futures in the week to Oct. 10, regulatory data released on
Friday showed.
    The Commodity Futures Trading Commission's weekly
commitments of traders report also showed that noncommercial
traders, a category that includes hedge funds, increased their
net short position in CBOT wheat and trimmed their net short
position in soybeans. 
 Grains prices at  0307 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  440.00  0.50     +0.11%   +2.21%       444.00  51
 CBOT corn   351.50  -1.25    -0.35%   +0.72%       352.30  53
 CBOT soy    995.50  -4.75    -0.47%   +0.35%       968.98  70
 CBOT rice   12.18   -$0.01   -0.04%   -0.57%       $12.36  60
 WTI crude   51.85   $0.40    +0.78%   +2.47%       $50.23  62
 Euro/dlr    $1.181  -$0.002  -0.14%   -0.20%               
 USD/AUD     0.7875  -0.001   -0.16%   +0.72%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral; Editing by Tom Hogue)
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