Markets

Soybeans fall after credit tightening

By Jeff Wilson (China Daily)
Updated: 2011-02-21 13:55

CHICAGO - Soybeans fell the most in three months on speculation that monetary tightening in China and improving prospects for South American crops will lower demand for US supplies. Corn fell from a 31-month high.

China lifted banks' reserve requirements last week, 10 days after boosting interest rates.

Related readings:  Import price of soybeans rises  Soybean overseas buys hit record high in 2010  China December soybean shipments may decline 2%  PBOC slaps differentiated reserve ratios on small banks

The moves, aimed at restraining inflation, may reduce raw-material consumption in the country, the world's biggest consumer of grain and oilseeds. Rain may increase yields in Brazil and Argentina, the largest soybean exporters behind the US.

"China's moves to slow growth were a surprise," said Chad Henderson, a market analyst at Prime Agricultural Consultants Inc in Brookfield, Wisconsin. "People are concerned about slower growth."

Soybean futures for May delivery fell 35.5 cents, or 2.5 percent, to close at $13.81 a bushel at 1:15 pm on the Chicago Board of Trade, the biggest decline since Nov 19. Last week, the price fell 2.5 percent, the second straight decline.