WINNIPEG: US grain and soybean futures slid sharply on Monday along with many other commodities as disappointing economic growth in China triggered selling, with Chicago wheat falling the most in two weeks.
Commodity markets were rattled by official data showing that economic growth in China slowed in the first three months of 2013 to 7.7 percent, from 7.9 percent in the previous quarter.
"The big story is gold is suffering some sharp losses, the crude market's down, everything's down," said Karl Setzer, analyst for MaxYield Cooperative. "We're just not seeing any bullish news come through this market today at all."
Concerns about China, the world's top consumer of raw materials, hit the grain markets, which were already reeling from forecasts that supplies will rebound this year after weather-hit harvests in several major producing countries during 2012.
In a sign of this bearish outlook, large speculators cut their net long positions in Chicago Board of Trade corn and soybean futures, leaving them with their biggest net short position in corn since June 2010.
Wheat fell the most on Monday, giving up all of a 2.4 percent gain on Friday that was linked to weather worries and Chinese interest in importing US wheat.
CBOT May wheat fell 2.9 percent, or 21 cents, to $6.93-3/4 a bushel, tumbling through key support levels at the 30-day and 40-day moving averages.
May corn dropped 1.8 percent, or 11-3/4 cents, to $6.46-3/4, and May soybeans gave up 1.3 percent, or 18 cents, to $13.95 after Friday's two-week peak of $14.19.
The US Department of Agriculture on Monday reported the sale of 480,000 tonnes of US soft red winter wheat to China for the new marketing year 2013/14, but the market shrugged off the widely expected sale.
Wheat rose last week amid concerns the US hard red winter wheat crop would be damaged by a recent bout of wintry weather.
After markets closed, the USDA said 36 percent of the US winter wheat crop was in good or excellent condition as of Sunday, unchanged from a week ago, and far short of the 64 percent in such shape a year ago.
"We've seen wheat bounce back many times and the general assumption right now is some damage took place, but just how much is a bit uncertain and will come out in the days ahead," said Shawn McCambridge, grains analyst with Jefferies Bache in Chicago.
Weather outlooks offered hope of some favorable conditions for winter wheat and spring-planted crops.
Rain is in the forecast for the southern Plains and should give relief to a crop that has been stressed by depleted soil moisture since being planted last fall, said John Dee of Global Weather Monitoring.
Across the US Midwest and northern Plains, precipitation and cold weather further delayed planting of spring crops, and more storms are forecast for this week, Dee said. However, the wet conditions would provide crucial moisture to the US Midwest, reflected by new-crop corn contracts falling faster than the old-crop months.
The USDA estimated US corn planting at just 2 percent complete by April 14, down from the average trade expectation of 6 percent finished and off the five-year average of 7 percent planted.
Spring wheat plantings were 6 percent complete, less than half of the five-year average of 13 percent.
"It's above all the next two weeks that will set the tone for the season," French grains consultancy Agritel said. "The weather in the United States should therefore clearly dominate the market in the coming days."
The soybean market was pressured by a sharp drop in crude oil and US soybean crushing data that offered no reason to buy.
"It was the last bullish chance that that market had today," Setzer said.
The US soybean crush rose marginally to 137.08 million bushels in March, in line with forecasts, National Oilseed Processors Association data showed on Monday.
Soybeans' losses were less than the grains' declines amid strong nearby demand from processors and slow farmer sales of old-crop supplies.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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