Chicago Board of Trade corn and soyabean futures dropped on Tuesday on concerns that commodity purchases from China will slow as the country's economy softens, traders said. Wheat futures firmed despite worries about the viability of US exports as investment funds covered short positions following a decline to the lowest in nearly four months on Monday.
Soyabeans, on track to snap a three-session winning streak, notched the biggest decline. The selloff was sparked by a report that showed that China's manufacturing sector contracted at its fastest pace in three years during August. "You can see the writing on the wall that eventually export demand (from China) will get a little bit weaker," said Mark Schultz, chief analyst with Northstar Commodity Investment Co.
China is the world's largest importer of soyabeans, making the oilseed market sensitive to macroeconomic sentiment about the world's No 2 economy. CBOT November soyabeans were down 14-1/4 cents at $8.73-1/4 a bushel at 10:51 am CDT (1551 GMT). CBOT December corn was 4-1/2 cents lower at $3.70-3/4 a bushel.
Soyabean prices were also curbed by a US Department of Agriculture crop progress report, released after the market close on Monday, which pegged 63 percent of the soyabean crop at good to excellent, unchanged from last week and contrary to market expectations of a slight decline. CBOT December soft red winter wheat was up 4-1/2 cents at $4.89-1/2 a bushel.
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