Soyabean futures at the Chicago Board of Trade closed lower on Wednesday on follow-through technical sales amid rising US soyabean stocks due to sluggish exports, traders said.
Also bearish was the drop in other commodity markets metals, crude oil, lumber, cattle all tumbled.
With the increase in speculative money from index funds flowing into commodity markets, commodities tend to move together.
March soya closed 5-3/4 cents lower at $5.72-1/4 per bushel and May was 6 lower at $5.84. The drop in commodities across the board was reflected in the Reuters/Jefferies CRB Index of 19 commodity futures, which closed 3.57 lower at 317.87 a three-month low.
"There was talk this about redemption's from the index funds. That was given as a reason why the energies were so much weaker and gold was weaker," said Roy Huckabay, analyst with The Linn Group, a Chicago trade house.
Some had been expecting to see investor redemption in March as some commodity indexes were down in February. The Goldman Sashes Commodity Index fell about 10 percent in February and the Dow Jones AIG Index was off about 6.6 percent.
US soya exports continue to lag a year ago, as China has been souring a large portion of its soyabeans from South America. There was another round of heavy March soyabean deliveries, 863 lots on Wednesday reminders of ample WE supplies.
A Dowdy Weskit customer was the main stopper of 651 lots. CBOT soya registrations increased to 3,838 lots from the previous 3,700. Concerns that soya-based feed demand could wane as the deadly bird flu virus spreads across Europe, Asia and the Middle East added to the bearish tone.
South American weather was becoming less of a market factor as the crop in southern Brazil and Argentina was nearing maturity. Recent rains in both regions aided soyabean pod filling. Harvest is under way in central Brazil where rains were causing some disruptions, said Meteorlogix weather service.
Recent storms that moved across the Midwest gave the soil much-needed moisture ahead of the planting season, traders said. That, plus expectation of large US soya plantings this spring at the expense of corn should weigh on prices this season.
Midwest basis bids for soyabeans on Wednesday were mostly steady with farmer sales quiet, dealers said.
The soya products ended weaker on technical selling. Soyaoil lost ground to soyameal as the oil/meal spread continued to correct after last week's rally in soyaoil to highs not seen since October 2005.
March soyameal closed 70 cents lower at $171.80 per ton, May was off 90 at $173.40. March soyaoil settled 0.36 weaker at 23.59 cents per lb and May was down 0.39 at 23.92 cents. In the futures delivery market, there were no soyameal postings but there were 386 March soyaoil deliveries.
Customers of Dowdy and Man were the key stoppers. Meal registrations with the CBOT were unchanged at 34 lots. CBOT soyaoil registrations increased to 6,413 lots late on Tuesday from the previous 6,343.
Funds sold about 4,000 soyabeans and 1,500-2,000 each in soyaoil and soyameal.
Comments
Comments are closed.