They said while main importers, including China and Indonesia, were asking for more cuts in prices, suppliers were trembling with worry over cancellations of contracts signed before the latest declines in international prices.

"We don't see any firm interest at the moment. Everybody is watching and watching," said a trader.

"Prices are going down. We are hoping they will bottom out. But nobody can tell if that's happening soon."

On Thursday, Chicago soybean futures sank further amid signs that domestic processors were slowing the usage of soybeans. It followed declines earlier this week triggered by rumours on defaults by vegetable oil buyers from Pakistan and India.

In Australia, a major trader confirmed to Reuters earlier on Friday that China and Bangladesh had cancelled up to 100,000 tonnes of Australian canolashipments.

Traders in Australia, which has emerged as one of the world's major suppliers of canola and oilseed, now fear the outbreak of defaults, cancellations and rollover of shipments will add new injury to the collapse in world prices.

Though traders in Singapore could not confirm the canola cancellations, they said they were not surprised as Chinese buyers were asking for a discount of around $10 per tonne for soybean or soyameal compared with current market prices.

"Now they're asking 10 dollars down (compared with the market prices). They're testing the market whether any suppliers are interested at these low prices."

" Suppliers are not interested because prices are too low," said a soyameal trader. "They've been a lot of defaults in soyameals. Suppliers were from the sub-continent and Hong Kong. It is a problem. But it's a normal practice by the Chinese (when prices drop)."

The slide in soybean and other soy product futures, occurred against the backdrop of a weak US export outlook due tothe global economic situation, abundant new suppliers from South America and a possible third consecutive record US crop this year. World soyabean production this year is expected to total 156 million metric tones for the second straight year, with weak demand more than doubling leftover stockpiles to 24 million metric tones.The bearish effect of this supply has been accented since last month when Brazil, the second ranking exporter after the United States, devalued its currency, a move that cheapens its exports.

Traders in Singapore said the problem of defaults was not confined to the oilseeds, soyameals or vegetable oil market.

One trader said China sold the Philippines rice which it had just bought from Vietnam due to price declines, while Pakistan failed to ship rice contracted by Indonesia.

"There's worry that this (cancellation) is going to continue," the trader said. Yet he added: "When they talk about defaults, you usually push down the market. But eventually those quantities which have beendefaulted have to be bought again."