The Chicago Board of Trade soyabean market fell to a four-month low on Tuesday, continuing its downward slide amid huge stocks and the government's recent prediction that US farmers will plant a record number of soya acres, traders said.
Selling escalated when the May contract slipped through $5.59-1/2, a November low, triggering a round of sell-stops. Those sales surfaced after technical problems forced a pause in trading.
CBOT pit trading was halted for 40 minutes, from 10:41 am CDT (1541 GMT) to 11:20 am CDT, due to a technical glitch. May soya closed 6-1/4 cents weaker at $5.58-3/4 per bushel, after sliding to a session low of $5.57-1/2 a four-month bottom on a continuous chart.
The back months ended 3 to 8 cents lower. "We broke some key support levels in soyameal $172 in soyabeans we took out $5.60 and hit stops at the previous low of $5.59-1/2.
We just accelerated the sell paper out here," said one CBOT trader. Commercial pricing helped underpin prices, traders said. New-crop November soya continued to lose ground to December corn, following the trend that started on Friday after the USDA forecast a record large US soya planting at the expense of fewer corn acres.
Recent rains across the Midwest, which recharged soil moisture ahead of the planting season, added to the bearish sentiment, along with an active South American soya harvest.
Commercial pricing underpinned the market, which was technically oversold, falling nearly 30 cents since USDA issued its plantings report last on Friday.
The nine-day relative strength index for May soya closed at 28, within the 0-30 range indicative of an oversold market.
Firms continued to roll their May positions before the start of the delivery period and trade was becoming more active in the July contract. Midwest spot basis bids for soyabeans were steady on Tuesday, with farmer sales quiet after the recent dive in CBOT soya prices.
The soya products followed soyabeans lower amid ample supplies of both meal and oil. The weakness in soyameal added to the sell-off in soyabeans, traders said. May soyameal settled $2.10 per ton weaker at $171, with the deferreds down $1.20 to $2.
May soyaoil ended 0.20 cent weaker at 22.44 cents per lb, breaking through key support at 22.50. The back months ended steady to down 0.22. Commodity funds sold 5,000 soyabean futures and 2,000 each of soyaoil and soyameal.
Soya futures volume was down from the past two sessions estimated at 84,708 contracts. Options trade was estimated at 33,920 lots. Soyameal trade was pegged at 32,636 futures and 2,689 options.
Estimated soyaoil volume was 28,404 futures and 3,542 options. Malaysian palm oil futures closed firm overnight on a short-covering bounce, traders said.
But a stronger ringgit was likely to keep prices from rising substantially.
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