Soyabean futures at the Chicago Board of Trade fell to near six-month lows on Friday, pressured by the recent improvement in US Midwest crop weather and forecasts for more rain this weekend, traders said.
"We're dialing in this moisture. We got a favourable weather pattern since the 11th. I think now we've reached a level of support in November soyabeans," said Don Roose, an analyst with US Commodities.
September soyabeans fell below $6 per bushel for the first time since late February to close 12-1/2 cents weaker at $5.97-1/4. New-crop November settled 12-3/4 cents lower at $6.07-1/2 - dropping below its 200-day moving average of $6.15-3/4 to $6.04-1/4.
Funds were liquidating longs, selling roughly 6,500 contracts. Cargill Investor Services, SAK Trading, Fimat Futures, R.J. O'Brien and Refco were among the sellers of November, traders said.
Soyabeans benefit from August rains as they set and fill pods, enhancing yield potential.
Scattered showers moved through the Midwest on Thursday and additional rainfall was expected in parts of the crop region on Friday and Saturday, said Meteorlogix weather. Rainfall of 0.25 to 0.75 inch was forecast for much of the belt.
"This is probably the most favourable forecast we have had for the dry areas of the Midwest for most of the summer," Meteorlogix forecaster Mike Palmerino said. "This will improve soyabean conditions."
The annual US Midwest crop tour begins Monday and US grain traders and analysts said they will be monitoring the results to get a clearer picture of whether August rains improved yield potential.
Some underpinning stemmed from technically oversold conditions, with the nine-day relative strength index for November closing near 20 on Friday. An RSI of 30 or below is one indicator of a technically oversold market.
Also supportive were firm Midwest cash markets as farmer sales have dried up this week due to the drop in futures prices, dealers said.
There were also hopes this week's fall in futures may stimulate fresh export business, especially as some traders believe that ocean freight has hit a bottom.
The soyameal and soyaoil markets were pressured by the weakness in soyabeans. September soyameal closed down $4.10 per ton at $186.80, with the deferreds down $2.60 to $4.10. September soyaoil was down 0.23 cent at 22.28 cents per lb, with the back months 0.25 to 0.37 weaker.
The September crush was up 0.95 cent at 58.79 cents per bushel.
Softer US cash soyameal markets were also bearish. Soyameal supplies were seen increasing after several US processors in the western belt resumed crushing this week after recent downtime time.
Malaysian palm oil futures closed firm overnight. Palm extended a climb on Friday amid fears that haze from Indonesian forest fires, which disrupted production last week, could return soon, traders in Kuala Lumpur said.
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