US soy, corn fall on swine flu fears

US soy and corn futures fell on Monday, with soy declining more than four percent, on fears that the swine flu will slash global meat consumption.

 

The weakness in crude oil and Asian stocks also pressurised grain markets, analysts said.

 

The spot-month soy dropped to a two-week low, cancelling some of the gains made in recent weeks on robust Chinese demand and low supplies from Argentina.

 

A Sydney-based trader said there are concerns that various countries are banning imports of US meat and that is affecting products like pork, even though the World Health Organisation said there appears to be no link.

 

The trader also said a reaction is anticipated to affect meat consumption, which ultimately will affect demand for grains in the animal feed industry.

 

Fears of a global swine flu, which first emerged in Mexico, grew over the weekend with new infections in the US and Canada discovered on Sunday (Apr 26). The virus has so far killed up to 103 people, and millions of Mexicans had taken to hiding at home.

 

Despite the name, the new strain is not infecting pigs and has never been in pigs, but any perception of a link to pigs could cause consumer fears that would sharply reduce demand for pork and livestock feed.

 

CBOT May soy fell 4.16 percent to US$9.97 per bushel and May corn fell 3.4 percent to 3.64-¼ per bushel.

 

Russia has already imposed curbs on meat imports from North and Latin America.

 

China's Dalian soymeal futures and soy most-traded January contract fell by their daily limit of five percent following losses on CBOT. Dalian corn also fell about two percent as the market anticipates Beijing to release its large corn reserves.