The Chicago Board of Trade soyabean market closed slightly lower in the front months on Tuesday after a choppy session driven by technical type moves, traders said. The top four contracts closed 1/4 to 1-1/4 cent per bushel lower, stabilising after rising more than 35 cents in little more than a week. March closed 1/2 cent weaker at $5.35-1/4 and May was 3/4 cent weaker at $5.35-1/2. "It was a tentative trade. We held yesterday's trade, but didn't extend it," said one CBOT floor broker.
The market opened lower after on Monday's fund-led short covering rally. Once the selling was exhausted, prices turned up. May soyabeans rose to $5.38, but failed to break through its 100-day moving average of $5.38-1/2, sending prices lower.
Funds were net buyers of roughly 3,000 lots, with Fiat Futures the big buyer of 2,500-3,000 may, floor traders said. That was met by commercial selling, primarily South American hedging in July and May, traders said.
There were mixed signals surfacing from the US cash market. Midwest processors backed off their spot bids after the fund-led rally in futures on Monday. The weakness reflected higher futures prices plus an increase in country movement.
But CIF soyabean values at the US Gulf firmed 3-4 cents amid fresh export interest.
The futures market remains underpinned by concerns that dry weather in Southern Brazil might cut bean yields.
The driest area is the No 3 Soya State of Rio Grande do Soul. The region was forecast to be dry for the next seven days, said Meteorlogix weather service. Also supportive was large open interest in March options at the $5.40 strike price. That was drawing futures prices to that level as expiration nears as option traders liquidate positions, traders said. On Friday is the last trading day and expiration for March bean options.
The combined open interest for March $5.40 calls and puts fell 2,623 contracts by Tuesday's open. But the number of open positions remained high at 18,210 lots. The National Oilseed Processors Association figure for the January US crush was disappointing at 141.4 million bushels.
It was below the average trade estimate for 142 million. The soyameal market closed higher amid meal/oil spreading prompted by NOPA data showing a big jump in soyaoil stocks. Funds continued to cover short positions, buying 3,500-4,000 lots.
Man Financial bought 1,000 March, traders said. March meal was up $1.90 at $163.10 per ton, while the back months were $1.50 to $2.20 higher. US cash soyameal markets were quiet, with spot offers steady to a shade weaker.