Soybeans Extend Losses as Financial Woes Worsen Demand Outlook

By William Bi

Oct. 16 (Bloomberg) -- Soybeans extended losses on growing concern that global economic crisis will cut demand for food and the plunge in prices may force some buyers to cancel contracts. Corn also fell.

U.S. retail sales dropped in September by the most in three years as rising job losses and falling home prices slowed consumer purchases, the Commerce Department said yesterday. There has been speculation of Chinese buyers canceling South American soybeans, said Li Jianlei, analyst of Cofco Futures Co.

``Cash sales have been sliding along with drop in futures,'' Beijing-based Li wrote in a report today. ``Prices will extend the fall beyond the immediate term.''

Soybeans for November delivery fell as much as 18.5 cents, or 2.1 percent, to $8.54 a bushel, in after-hours electronic trading on the Chicago Board of Trade. It traded at $8.715 at 11:22 a.m. in Hong Kong. Futures reached a record $16.3675 on July 3, and touched a 13-month low of $8.815 on Oct. 13.

China's record imports of 4.1 million metric tons in September also increased domestic supply, reducing future purchases and pressure prices, Li said.

Corn for December delivery fell as much as 9.25 cents, or 2.4 percent, to $3.7875 a bushel, the lowest since November 19, and traded at $3.875. The most-active contract fell 53 percent from a record $7.9925 June 27.

On the Dalian Commodity Exchange, soybeans for May delivery fell as much as 156 yuan, or 4.9 percent, to 3,011 yuan a metric ton (the exchange-imposed 5 percent limit to 3,140 yuan ($441) a metric ton, and was at 3,054 yuan at the end of the morning trading session.

To contact the reporters on this story: William Bi in Beijing at wbi@bloomberg.net;