GRAINS-Soybeans, corn at 2-month low as China imposes tariffs on U.S. farm goods

By Naveen Thukral

SINGAPORE, March 4 (Reuters) - Chicago soybeans and corn lost more ground on Tuesday, with both markets dropping to their lowest since early January as China's retaliatory tariffs on U.S. farm goods threatened to disrupt agricultural flows.

Wheat also fell, but losses were limited by worries over dry weather hurting yields in India.

"It is broadly negative for U.S. agricultural markets. It is going to have a bearish influence on prices," said Ole Houe, director of advisory services, Ikon Commodities in Sydney.

"There are enough corn and soybean supplies in the world for China to make the switch, it is more of an issue for the U.S."

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 slid 0.4% to $10.08 a bushel, as of 0611 GMT, while corn Cv1 lost 0.6% to $4.53-1/2 a bushel. Wheat Wv1 fell 0.5% to $5.45 a bushel.

China on Tuesday swiftly retaliated against fresh U.S. tariffs, announcing 10%-15% hikes to import levies covering a range of American agricultural and food products, and placing twenty-five U.S. firms under export and investment restrictions.

U.S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%.

China is by far the world's largest soybean importer, and Mexico is a major buyer of U.S. soybeans, corn and wheat.

Brazil's cultivated soybean area for the 2024/25 season was 50% harvested by February 27, up from 39% a week earlier and 48% by the same time last year, AgRural data shows.

Forecasts of dryness in India supported wheat prices, although news of a large Australian wheat crop limited gains.

Commodity funds were net sellers of CBOT corn, soybean, soyoil, wheat and soymeal futures contracts on Monday, traders said. COMFUND/CBT