Forexpros – Soybean futures slumped to a six-day low on Wednesday, as mounting fears over Italy’s debt crisis promoted investors to shun riskier assets while markets awaited a key monthly report on U.S. and global soybean supplies.
On the Chicago Mercantile Exchange, soybean futures for January delivery traded at USD11.9663 a bushel during European morning trade, dropping 0.65%.
It earlier fell by as much as 0.92% to trade at USD11.9375 a bushel, the lowest price since November 1.
Agricultural commodities continued to be affected by outside influences after the yield on Italian 10-year government bonds spiked to a euro-lifetime high of 7.42% earlier, a level widely viewed as unsustainable in the long-term.
Smaller euro zone nations Greece, Ireland and Portugal had to seek international bailouts once their borrowing costs rose above the critical 7%-mark.
The surge in yields came after clearing house LCH.Clearnet raised margins investors must provide to trade Italian debt.
The news saw risk aversion sharpen, boosting demand for the U.S. dollar. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.15% to trade at 77.69.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Meanwhile, the U.S. Department of Agriculture was to release its closely-watched report on U.S. and global soybean stockpiles for November later in the day.
U.S. soybean inventories were forecast to total 182 million bushels, up from October’s estimate of 160 million but below last year’s total of 215 million.
World stocks were expected to hit 63.6 million tonnes, compared to a previous estimate of 63.0 million tonnes. Global inventories totaled 68.8 million tonnes a year earlier.
Soybean futures were higher during the Asian trading session after government data showed that Chinese consumer price inflation moderated to 5.5% from 6.1% the previous month, easing fears over monetary tightening by Beijing.
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, according to the USDA.
Elsewhere on the Chicago Mercantile Exchange, corn for December delivery eased down 0.1% to trade at USD6.6063 a bushel, while wheat for December delivery dropped 1.2% to trade at USD6.4975 a bushel.
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