Soyabean futures at the Chicago Board of Trade sank on Friday, pressed by easing concerns about the US Soya crop after overnight rains in Illinois and Iowa and less threatening weather forecasts for August, traders said.
Good crop weather in the US Midwest has been feeding talk of record bean yields this year and a possible 3.0 billion-bushel US crop.
But heat and dryness in August could stress Soya in its key pod-setting and pod-filling stages.
Soya yields fell sharply last August due to drought. This week's weakness in US cash soyabean and meal markets contributed to the sell-off. Commercials were bear spreaders of soyabean and soyameal and outright sellers in meal, traders said.
Funds sold at least 1,500 Soya contracts and were about even in soyameal.
Spot soyabean prices slid to a 10-month low, with August falling below $6 for the first time since last fall.
The soyabean market ended 9-1/4 to 25 cents lower, with August down 25 at $5.99-1/2 and new-crop November down 15-3/4 at $5.69.
CBOT August 2004-August 2005 soyameal closed 50 cents to $6 per ton lower.
August was $2.10 lower at $198. "It's down, down, down I don't know where it will stop," said Vice Lesbians, a floor broker with AG Edwards.
Many traders were surprised by the extent of Friday's weakness with some anticipating August soyabean to hold at a key support level of $6.08. Selling stepped up when the price broke through.
"As far as I'm concerned, we've reached or exceeded prices to the downside.
They seem too cheap given the world supply situation," said Anne Frisk, Prudential Securities analyst.
The tightest US stocks of Soya in 27 years continue to discourage futures deliveries, with nil August notices on Friday first notice day.
And even though cash markets remain volatile, the demand for old-crop Soya is strong enough to continue depleting the available supply. Registrations with the CBOT stayed unchanged at 2 lots.
Tight supplies of old-crop Soya and soyameal have also kept the premium of old-crop over new-crop.
There were also zero deliveries against the August soyameal contract on Friday.
Meal registrations with the CBOT remained light at 57 lots. The nine-day relative strength index for August soyabean closed on Friday at 10 and for November the RSI was at 24. Both below the 30 level viewed as technically oversold by CBOT traders.
Soyaoil futures took their cue from soyabean to end 0.82 to 1.13 cent per lb. lower, with the back months reaching contract lows. August was 0.83 lower at 22.00 cents.
There were light deliveries against the August at 200 lots, which helped underpin August. Soyaoil registrations with the CBOT were unchanged at 3,770 lots.