Soybeans fall to new 6-year lows as China sell-off deepens

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image/: US soybeans fell to fresh six-year lows on Monday, caught up in a latest slide in commodity markets fanned by fears about the faltering economy in China, which is by far the largest importer of the oilseed.

Soybeans were also under pressure from favourable crop weather in the United States, which was easing concern about damage from torrential rain at the start of the growing season.

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Corn and wheat also fell as spillover from the wider commodities sell-off added to fundamental pressure from ample global supply.

“Agriculturals have been unable to entirely resist the downward spiral in China,” Commerzbank analysts said in a note. “Fears that Chinese demand for soybeans could abate is weighing on prices.”

Crude tumbled to its weakest in 6-1/2 years while industrial metals prices also hit multi-year lows as a 9 percent drop in Chinese equities intensified fears of a sharp downturn in the world’s biggest consumer of .

Chicago Board of Trade November soybeans fell to a contract low of $ 8.68 a bushel, which was also the lowest price in nearly 6-1/2 years for a most active contract. By 1144 GMT, it was down 2.2 percent at $ 8.70 a bushel.

Front-month September soybeans also hit a contract low of $ 8.84 that marked a near six-year low for a spot price.

“The other part of it is the weather in the United States and there is quite a lot of optimism on the crop,” Phin Ziebell, agribusiness economist, National Australian Bank, said of the slide in soybean prices.

Pro Farmer, a farm advisory service, forecast US soybean production at 3.887 billion bushels with an average yield of 46.5 bushels per acre, close to the US Department of Agriculture’s estimate earlier this month of 3.916 billion bushels.

Many in the market had seen the USDA figure as over-optimistic after early-season flooding, but benign conditions during the crucial August growth period have improved prospects for the autumn harvest.

CBOT December corn fell 1.8 percent to $ 3.70-1/2 a bushel, while December wheat fell 1.5 percent to $ 4.96-1/2 a bushel, after earlier touching its lowest since Aug. 12 at $ 4.93 a bushel. Pro Farmer projected US 2015 corn production at 13.323 billion bushels, based on a yield of 164.3 bushels per acre, below the USDA’s forecast but still projecting the third-largest crop ever.

US wheat remained curbed by large supply from northern hemisphere harvests, including in where Euronext wheat has been trading at three-month lows.

Copyright Reuters, 2015

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