GRAINS-Soybeans, corn, wheat drop as markets assess coronavirus

Michael Hogan

* Soybeans drop on China virus fears

* Wheat, corn also fall

* China not buying in U.S. despite trade deal (Recasts with European trade, adds new comment, changes dateline)

HAMBURG, Jan 28 (Reuters) - Chicago soybean fell again on Tuesday to around their lowest since mid-December on fears the coronavirus outbreak in China will disrupt demand.

Wheat and corn also fell. Lack of evidence China is increasing purchases of U.S. farm products after the Phase One trade deal between the two countries also depressed prices.

Chicago Board of Trade most-active soybeans were down 0.8% to $8.90 a bushel at 1203 GMT, having hit $8.88-1/4 a bushel on Monday, the lowest since Dec. 12.

Wheat fell 0.6% to $5.68-1/2 a bushel, corn fell 0.4% to $3.78-3/4 a bushel.

European equity markets rebounded early on Tuesday after Monday's falls, which saw investors worried about the economic fallout from the coronavirus outbreak in China.

Germany has confirmed its first case of the virus, raising concerns about the spreading of the flu-like illness after the death toll in China climbed to 106. The disease has also appeared in France.

Soybeans, corn and wheat are all down today largely because of the risk-avoidance mood in the market because of the coronavirus, said Matt Ammermann, commodity risk manager with INTL FCStone.

There is the mentality today that risk should be taken off the table first and then the actual implications of the coronavirus can be assessed later.

Whether the disease will actually reduce grains and soybean demand in China or whether it will not be serious enough to have an impact is the point of analysis in the markets.

Germany's Commerzbank added: "Until official Chinese authorities confirm that the virus has been brought under control, the prospect of consumer reticence in China a very important consumer of many agricultural products is likely to weigh on prices on the markets."

Despite the Phase One trade deal between Washington and Beijing, significant buying of U.S. farm products by China is not apparent. New competition to U.S. soybeans is looming from an expected bumper new crop in Brazil, with harvesting now underway.

A depressing factor, especially for soybeans, is the lack of evidence that China has resumed larger-scale purchases of U.S. supplies after the Phase One trade deal, Ammermann said.

The deal was signed and everything went quiet. Harvesting of Brazils soybean crop has started and the harvest is expected to be large.

The question is whether China has already bought enough soybeans from Brazil for its immediate needs. U.S. soybeans will anyway face increased competition from the new crop in Brazil in global markets." (Reporting by Michael Hogan, additional reporting by Naveen Thukral, editing by Mark Potter)