Chicago Board of Trade soyabean futures ended lower on Monday, with July soyabeans closing below $6 per bushel, pressured by good crop weather, traders said.
Crops in the driest areas of the belt, eastern Nebraska and western Iowa received a much-need drink over the weekend and the forecast was not threatening. Top soil moisture in parts of Nebraska and Iowa are 70 percent short to very short.
"It's just a benign forecast for the next couple weeks," said analyst Dan Cekander with Fimat USA. "There's no heat forecast for the next two weeks." Outlooks for the Midwest decreased rain coverage by 10 percent with 80 percent of the belt expected to see moisture this week. July soyabeans gapped lower at the start and closed 15-3/4 cents down at $5.84-1/2 per bushel, which was below its 20-, 50-, 100- and 200-day moving averages. New-crop November fell 16 cents to $6.11. The other months ended 5 to 15-1/4 weaker.
"We're suppose to see great rains over the next six to seven days. It gave the sellers a little more confidence," one CBOT floor broker said. US soya conditions did not change in the past week. USDA reported after the close that 67 percent of the US soyabean crop was in good to excellent condition, while traders expected a 1-2-point decline after last week's heat and dryness.
The gap between 2004/05 and 2005/06 weekly export inspections for soyabeans continues to grow. USDA said on Monday 9.653 million bushels of soyabeans were inspected for export last week. While that was within trade expectations for 7 million to 11 million, the tally was behind last year's by nearly 200 million bushels.
USDA is forecasting US 2005/06 soya exports will be off by 203 million bushels from the year before. Friday is the last trading day for July options. Traders were beginning to eye the $6 strike as potential volatility due to the large open interest at that level more than 38,000 as of Monday's open.
Midwest spot basis bids for soyabeans were mixed on Monday, with sales slow after the weekend. The soya products were also weaker. July soyameal closed $3 per ton down at $177.90, taking its cue from soyabeans.
The deferred months were down $1.90 to $3.50 lower. Soyaoil was also pressured by soyabeans, along with a fall in New York crude oil. With the boom in the soya bodiless industry, soyaoil continues to act more like an energy product than a food product.
July soyaoil was down 0.66 cent at 24.20 cents per lb, with the deferreds down 0.50 to 0.68. Commodity funds sold about 5,000 soyabean contracts, 3,000-4,000 soyaoil and were on both sides in soyameal, traders said.
Estimated volume was heavy in soyabeans and soyaoil and light in soyameal. An estimated 92,913 futures and 27,472 options traded. In soyaoil, an estimated 41,353 futures and 4,297 options traded. Soyameal trade was pegged at 17,482 futures and 2,073 options.
Weekly trade data issued by the Commodity Futures Trading Commission late on Friday showed large speculators cut their net shorts in CBOT soyabean futures/options during the week ended June 13. They remained net short in soyameal futures/options and reduced their net longs in soyaoil futures/options.
In world news, Canada said on Friday it detected a case of H5 avian flu in Prince Edward Island. There was going to be further testing to see if it was the virulent H5N1 strain of avian flu, with results expected this week.
The H5N1 strain of avian flu has not yet been found in North or South America. Also, a top trade official in New Delhi said on Monday India's soyameal exports were expected nearly to double to 3.7 million tonnes in the year ending September 2006 on strong demand from Vietnam and Japan and competitive prices. Malaysian palm oil closed weak due to a decline in soyaoil prices and weak demand, traders said.