Forexpros – Soybean futures were down for down for a fourth day on Thursday, tumbling to a six-week low as mounting concerns over the global economic outlook prompted investors to shun riskier assets.
On the Chicago Mercantile Exchange, soybean futures for November delivery traded at USD12.9688 a bushel during European morning trade, dropping 1.92%.
It earlier fell as much as 2.3% to trade at USD12.9138 a bushel, the lowest price since August 11.
At the conclusion of its two-day Federal Open Market Committee Meeting Wednesday, the Fed said it would buy USD400 billion worth of long-term Treasury bonds by June 2012, while selling an equal amount of short-term debt over the same period, in a move known as ‘Operation Twist’.
However, the Fed warned of “significant downside risks to the economic outlook, including strains in global financial markets.”
Adding to global worries, a preliminary reading of the HSBC China purchasing managers’ index fell to a two-month low of 49.4 in September, remaining in contraction territory for the third consecutive month.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season beginning October 1, according to the U.S. Department of Agriculture.
The downbeat outlook for global growth prompted investors to shun riskier assets, such as stocks and commodities and flock to traditional safe haven assets like the greenback.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.87% to trade at 79.09, the highest level since January 20.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Soybean prices have lost nearly 11% in September amid fears the global economic slowdown would hurt demand.
Elsewhere on the Chicago Mercantile Exchange, corn for December delivery tumbled 2.59% to trade at a two-month low of USD6.6763 a bushel, while wheat for December delivery plunged 2.72% to trade at a two-month low of USD6.4838 a bushel.
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