Soyabean futures at the Chicago Board of Trade sank early on Friday following the sell-off in all commodities as a stronger dollar sparked speculative liquidation in hard assets, traders said.
"I think the inflationary fever broke, so you are having a kind of exodus. The fuels started it and the metals followed ... it is hitting the commodity sector across the board," said Don Roose, analyst with US Commodities.
The July soya contract fell below its 50-day average of $5.92-1/4. By 10:50 am CDT (1550 GMT), July soya was at $5.87-1/4, down 10-3/4 cents per bushel. The back months were 9 to 11 cents down.
Commodity funds sold 5,000 soya contracts early Friday; Rand Financial sold about 2,000 July, traders said.
The soya products also were weaker, following the industry-wide trend. Soyaoil was under greater pressure due to the weakness in the energy markets. CBOT soyabean oil has been tracking crude oil amid a booming soya biodiesel industry.
July soyameal was down $1.70 at $173.60 per ton, with deferreds down $1 to $1.80. July soyaoil was 0.54 cent weaker at 25.03 cents per lb, with the back months 0.31 to 0.62 cent lower.
The fundamental picture for soyabeans remains bearish due to record large US soyabean supplies and improved planting weather next week.
"You're not going to get a lot of rain which will favour soyabean planting and you're going to see a warming trend, especially in the six to 10-day period, said Mike Palmerino, Meteorlogix forecaster.
The government presented no solution to the sector's indebtedness related to the 2005/2006 harvest season.
US Midwest spot basis bids had a weaker tone on Friday as processors were well supplied after the recent jump in farmer sales, dealers said. Country movement was quiet early Friday.