GRAINS-Soybean futures fall on weakness in oil market, China deflation worries

By P.J. Huffstutter

CHICAGO, March 10 (Reuters) - Chicago Board of Trade soybeans turned lower on Monday, as prices were weighed down by weakness in the oil market and traders' concern over Chinese deflation, market analysts said.

In addition to market uncertainty caused by U.S. trade tariffs, traders were tuned into news that China's consumer price index fell at the sharpest pace in 13 months in February - and how much that might chill demand for U.S. soy demand going forward.

Soybeans also are being pressured by the South American harvest coming on strong, said Karl Setzer, partner at Consus Ag. "There's just not a lot of positive news right now for soy."

Meanwhile, corn futures ticked higher ahead of a key global supply-and-demand report, as market participants adjusted their positions.

And wheat futures firmed, after the latest Russian wheat crop estimate is well below the USDA projection - as is the country's export target.

A lack of rain forecasts in top wheat producing regions also gave wheat futures a boost, said Ben Buckner, AgResource Co grains and dairy analyst.

While this isn't typically the time of year that weather will severely damage crop production, a lack of moisture can affect have some effect on yields, Buckner said.

Chicago Board of Trade most-active soybeans Sv1 was down 0.78% to $10.17 a bushel by 1643 GMT, with soyoil futures following crude oil lower in the session. Corn Cv1 was up 0.53% at $4.71-3/4 a bushel and wheat Wv1 rose 2.49% to $5.65 a bushel.

Trade disputes over U.S. tariffs continued to underpin agricultural markets, market analysts said, with the next stage of the U.S. trade war with top global soybean buyer China awaited.

Market players are waiting for the U.S. Department of Agriculture's next monthly supply/demand report on March 11. The report will consider trade policies in place when the forecasts for grains and soybeans are issued, an agency official said on Thursday.