Soybeans represent "the story" in the grains and oilseed complex, a leading commentator said, after US farm officials cut hopes for supplies, citing bigger estimates for the domestic crush.

The US Department of Agriculture, in its benchmark Wasde crop report, lowered by 10m bushels (270,000 tonnes) to 130m bushels (3.5m tonnes) its estimate for US soybean inventories at the close of 2012-13.

The downgrade reflected an increased estimate for the US soybean crush, after a series of strong monthly data from industry group the National Oilseed Processors Association, which unveils its next data on Friday.

The crush has been supported by firm margins, supported by a strong period for US exports of soyoil, which is becoming hard to come by in top exporter Argentina after the poor soybean harvest earlier this year.

'Story is about soybeans'

The fresh stocks estimate put US inventories on course to end 2012-13 at their lowest in nine years.

"That's the lowest you could be with setting off serious price inflation," said Sal Gilbertie, president of Teucrium Trading, an issuer of commodity-based exchange traded products.

"The story is about soybeans. The balance sheet remains very tight," he said, noting "insatiable" demand from China, the top importer, for the oilseed.

The USDA separately announced the sale of 115,000 tonnes of US soybeans to China.

Soybean futures for January lost ground despite the stocks downgrade, which was in line with market forecasts, shedding 0.2% to \$14.72 ¼ a bushel in Chicago for March delivery.

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