GRAINS-Soy futures set six-week low on Argentina export competition

By Tom Polansek

CHICAGO, Sept 23 (Reuters) - Chicago Board of Trade soybean futures set a six-week low on Tuesday under pressure from a lack of Chinese demand for U.S. supplies and the prospect of increased competition for sales from Argentina after the country waived grain export duties.

The market traded flat after falling earlier in the session, as recent losses were thought to be overdone, traders said.

Wheat futures also recovered after setting new contract lows, with an expected boost to Argentine exports also weighing on the cereal market amid ample global supply.

"We had gotten a bit oversold, especially in soybeans," said Ted Seifried, chief market strategist for Zaner Ag Hedge.

Argentina on Monday temporarily eliminated export taxes on grains and their byproducts, as well as on beef and poultry, in a bid to speed up sales abroad and rake in much-needed dollars to prop up the flagging peso.

Chinese buyers then booked at least 10 cargoes of Argentine soybeans, three traders said, dealing another setback to U.S. farmers already shut out of their top market and hit by low prices.

The most-active CBOT soybean contract Sv1 was unchanged at $10.11 a bushel by 11:30 a.m. CDT (1630 GMT) after dropping earlier to $10.05 a bushel, its lowest level since August 12.

"China is the key U.S. beans buyer," said Andrey Sizov, head of consultancy Sovecon. "The temporary Argentina taxes elimination put additional pressure on the market."

Hopes of a resumption in U.S. soybean trade with China were dashed when a call on Friday between U.S. President Donald Trump and Chinese counterpart Xi Jinping brought no news about agricultural commodities.

Soybeans and corn are also facing seasonal supply pressure from the onset of the U.S. harvest, though doubts over yields have helped underpin futures.

The U.S. corn harvest was 11% complete by Sunday and the soybean harvest was 9% finished, according to a government report.

CBOT corn Cv1 was up 2 cents at $4.23-3/4 a bushel. CBOT wheat Wv1 rose 9-1/4 cents to $5.20 a bushel after hitting its lowest level in almost six weeks at $5.07-1/4.