Soyabean futures at the Chicago Board of Trade plunged on Friday, setting back after the recent wave of buying by investment funds, traders said. It was the first time in six weeks the market closed lower on Friday. The sell-off was sparked by a sharply lower close in Asian futures markets amid fears that Beijing may raise interest rates for the first since October. May soyabeans closed 22-1/2 cents lower at $6.49 per bushel, with the deferred down 8 to 23-1/2 cents.
May slip below its 10-day moving average of $6.48-1/2 to a session low of $6.46.
Commodity funds were net sellers of roughly 2,500 contracts, with volume lighter than in the week. Commercials were also net sellers, traders said. The weakness in soyabeans was a spillover from the trend in other commodity markets, with the Reuters CRB Index of 17 commodity futures closing 0.61 percent lower at 319.20.
The market was overdue for a downward correction, with the spot month reaching a seven-month high this week as money under management continued to flow into the commodity markets, despite a large global supply of oilseeds.
CBOT soyabeans fell even though analytical firm Informa Economics forecast for a reduction in this year's Soya acreage. Informa estimated 2005 US Soya acreage at 73.2 million, trade sources said. That compared with 75.2 million acres planted by US farmers last spring.
Most traders expect US farmers to plant fewer soyabean acres this spring amid worries that their bean yields could be devastated by the spread of Asian soyabean rust into the northern Midwest. The US government will release its planting intentions report on March 31, which is the first preview of farmers' planting ideas for 2005.
A shrinking Brazilian soyabean crop due to a drought in Southern Brazil remains a concern. But much of the reduction has been priced in to CBOT markets, with the lowest trade estimates for the Brazilian bean crop running between 51 million and 52 million tonnes.
That compares with USA's current Brazilian crop estimate for 59 million tonnes. Meteorologist Sombre said on Friday that Southern Brazil and part of Mateo Gorse do Soul State will stay dry over the weekend, but the centre-west Soya areas will be showers.
Midwest cash basis bids were steady to firm as country sales slowed due to the declines in CBOT Soya futures. The soyameal market also set back, closing $3 to $5.30 per ton lower. May was down $4.70 at $192.10.
Weaker cash meal markets in the United States, South America and Europe contributed to the sell-off in meal, traders said. CBOT soyaoil futures fell hard, following the weakness in soyabeans. The market was also due for a correction after its big jump tied to commodity fund buying, traders said.
May soyaoil was down 0.76 at 23.58 cents per lb., with the deferred down 0.30 to 0.77 cent. Malaysian palm oil futures closed mostly lower overnight. Traders in Kuala Lumpur said palm sagged after a roller-coaster ride that saw investors taking profit from a rally that began a week ago.
There were no deliveries posted against the March soyaoil contract on Friday. The CBOT may crush margin continued to correct after on Wednesday's plunge, up 3.8 cents at 33 cents per bushel.