Chicago Board of Trade soyabean futures fell to contract lows in most months on Friday, pressured by prospects that the US soyabean crop is getting bigger as weather was improving, traders said. September soyabeans closed 4-1/2 cents lower at $5.47 per bushel, after making a contract low of $5.46-1/4. New-crop November ended 4 lower at $5.60-1/2.
Contract lows were hit in September, January, March, May and July. "I don't see any real shortage of beans. I think the USDA is underestimating the crop the weather looks good," said Sid Love, analyst with Kropf/Love Consulting in Overland Park, Kansas.
August is the critical yield-determining period for soyabeans as the crop sets and fills pods. Currently, USDA is estimating the 2006 US soyabean crop at 2.9 billion bushels, down from 3.1 billion last year.
But USA's 2006 forecast was based on crop conditions as of August 1. Love added that US cash soyabean prices were cheap, below $5 per bushel in several Midwest locations and harvest was underway in far southern areas.
"With cash beans as cheap as they are, futures still have a lot of air in them," he said. Adding to the bearish sentiment was China overnight raising its interest rates to slow its economy.
"The trade has been expecting them to make some changes the last couple weeks but psychologically it is a little negative they are just trying to put a lid on the growth but people still have to eat.
I think the other markets will feel a little more pressure than the grain markets," one CBOT cash-connected trader said. Scattered rains and mild weather was improving yield potential of this year's US soya crop. Traders expected to see a 1-3-point improvement in US soya conditions in USA's weekly crop progress report on Monday.
Helping soyabean prices from going even lower was technically oversold conditions. Also, with futures at 8-1/2 month lows there was a pick up in export business.
There was talk that China bought 6-9 cargoes of US soyabeans out of the Pacific Northwest this week.
Spot basis bids for US Midwest were mixed on Friday after scattered sales this week. Farmer sales were quiet on Friday, which underpinned basis levels at some locations. But seasonal downtime at various crushing plants pressured basis bids at other interior points as processors stopped souring soyabeans while they were down, dealers said.
Soya products were pressured by the weakness in soyabeans but the soyaoil market was choppy, rebounding by the close. September soyameal closed $1.20 down at $159.30 per ton, with the back month's $1.10 to $1.90 lowers. September soyaoil settled 0.06 cent up at 24.92 cents per lb, with the deferreds 0.01 to 0.20 cent higher. The September crush ended 2-1/2 cents up at 77.58 cents/bushel. A rebound in crude oil and higher Malaysian palm oil prices overnight lent support to soyaoil.
Also, the soyaoil market was hit hard by heavy fund long liquidation the past week, which offered as the market was due for a bounce. Commodity funds sold about 2,000 soyabean contracts sold 1,000 soyameal and were close to even in soyaoil.