A turn to good crop weather in the US Midwest during August, the key yield-determining month for soy, drove Chicago Board of Trade soybean futures to 8-1/2 month lows and new contract lows on Friday, traders said.
CBOT soy closed 4 to 12 cents per bushel lower, with August down 6 at $5.51 per bushel. New-crop November was down 6 at $5.68-1/4 per bushel. The new contract low for August is $5.49 per bushel, below the previous low of $5.55. Plunging corn and wheat futures in response to bearish USDA forecasts for corn and wheat production also weighed on soybean futures.
Funds sold 6,000 contracts, traders said. Volume was estimated by the exchange at 77,834 futures and 21,591 options. The drop in soy futures countered some early ideas for a firm market because the US Department of Agriculture forecast this year's soy crop at a level below expectations.
USDA, in its August crop production and supply/demand reports, forecast this year's US soy output at 2.928 billion bushels, below an average estimate for 3.028 billion.
However, "it's harder to embrace today's bean number because the market is well aware the last 2-1/2 weeks of weather has been much more favourable," said Rich Feltes, director of research for Man Financial. Feltes was part of a CBOT panel discussion following the release of USDA's crop report.
USDA forecast old-crop US soy ending stocks at 515 million bushels, below estimates for 533 million and new-crop ending stocks at 450 million, below an average estimate for 572 million.
Traders and analysts pointed out that weather in August would determine the final production for this year's US soybean crop. Meteorlogix weather on Friday said scattered showers and moderate temperatures in the US Midwest would favour pod-setting of the soy crop and ear-filling of the corn crop. Export activity overnight included news Taiwan bought 23,000 tonnes of US corn and 12,000 tonnes of US soy.
Cash basis bids for soy in the Midwest were firm as export demand remained brisk.
Deliveries on the August contract totalled 544 lots amid scattered stopping.
Soymeal futures ended $1.40 per ton higher to 90 cents lower after falling to new contract lows in early dealings in all months amid spillover pressure from the tumbling soy.
August ended up $1.40 at $159.30 per ton. Soymeal volume was estimated at 29,250 futures and 1,237 options. Deliveries on the August contract totalled 50 lots and commercial Bunge stopped all of the soymeal. Soyoil futures closed 0.67 to 0.83 cent per lb lower, with August down 0.67 at 25.43 cents per lb. Traders said speculative long liquidation hit the soyoil market, with funds selling 10,000 contracts. Soyoil volume was heavy, estimated at 57,121 futures and 3,674 options.
Deliveries on the August contract of 175 lots were all stopped by an R.J. O'Brien customer.
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