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Soybeans dropped on Monday as imports by China, the worlds biggest consumer, may be lower than the U.S. Department of Agricultures forecast. The agency projected on June 13 shipments will total 69 million metric tons in the 12 months starting October 1. According to Bloombergs survey China will import 63 million instead, which is one of the reasons soybeans dropped 15% this month.

On the Chicago Mercantile Exchange, soybeans futures for July delivery lost 0.63% for the day, standing at $15.0638 a bushel at 9:09 GMT. The oilseed varied between daily high and low at $15.0938 and $14.9338 a bushel respectively.

According to Tommy Xiao, an analyst at Chinas biggest agricultural researcher, Shanghai JC Intelligence Co., soybeans demand in China tumbled in April and May as farmers were forced to dispose of poultry following an outbreak of the H7N9 bird flu. Xiao also said for Bloomberg that “The USDA grossly overestimated China’s demand” and predicted imports will equal 60.5 million tons.

Meat and cooking oil consumption is also forecast to decline as Chinas economy is poised to slow down. Xiao commented: “Meat and cooking oil use is slowing with the lackluster economy, and government officials arent dropping as much money on banquets and fancy restaurants.”

The World Bank reduced its forecast for China’s economic growth to 7.7%, down from 8.4%. This comes after during the last week of May the IMF cut its economy growth forecast for China to 7.75%, down from 8%. The Organisation for Economic Co-operation and Development also trimmed its expectations to 7.8% from 8%. Chinese leaders made statements in May they will tolerate a slower, but more ecological friendly expansion, boosting concerns for commodities demand.

According to a Bloomberg survey, global soybeans inventories are expected to jump by 19% to 74.04 million as of September 2014. Production in the U.S., the worlds second biggest producer and exporter, will rise 12% and total 3.39 billion bushels in the season starting September 1, the USDA in its report on June 12.

Wheat declines

Elsewhere on the grains market, wheat is marking a daily loss, while corn remained fairly unchanged.

Wheat futures for July delivery traded 0.33% lower on the day, standing at $6.7775 a bushel at 9:01 GMT. The grain varied between daily high and low at $6.7838 and $6.7475 respectively. Wheat prices have been pressured by ample supply.

Ukraine is expected to boost its wheat export to 8-9 million tons for the 2013-2014 period. Australia projected that its 2013 crop will jump to 25.4 million tons, above last season’s 22.1 million tons and surpassing March’s expectations of a 24.9 production. Germany’s output may rise 7.3% to 24 million tons according to farm industry group Deutscher Raiffeisenverband e.V.

Wheat futures fell to a three-week low of $6.7912 on Wednesday as the USDA said wheat reserves will exceed the 655 million bushels market expectations and total 659 million bushels. U.S. wheat output is also forecast to surpass market projections.

Worldwide output in the 2013-2014 crop year is expected to be 6.1% higher than the preceding period and near the record level of the 2011-2012 season, totaling 696.9 million metric tons of wheat.

Corn fairly unchanged

Meanwhile, corn futures for July delivery traded at $6.5538 a bushel at 8:55 GMT, up 0.06% on the day. Prices moved between days high and low at $6.5588 and $6.5163 per bushel respectively.

The USDA said U.S. corn stockpiles before the 2014 harvest will total 1.949 billion bushels, well above market projections of 1.829 billion. This fall’s U.S. harvest will also exceed the 13.82 billion bushels expectations and will total 14.005 billion. The record domestic output will more than double inventories before the 2014 harvest, said the agency.

According to USDAs weekly crop progress report last Monday, 95% of the nation’s corn crop was planted as of the week ending June 9, compared to 91% in the preceding week. This is lower than the same time last year when 100% of the crop was planted and is also below the five-year average of 98%.

Market players are now looking ahead into this weeks USDA crop progress report, due at 4:00 PM Eastern Time, which would strongly influence grains pricing throughout the week.

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