Soybean futures on the Chicago Board of Trade fell on Tuesday on continued pressure from favourable crop weather for the US Midwest, traders said. But the market recovered from its early lows as it became oversold after Monday's limit down move and more selling pressure on Tuesday.
The $5 drop in crude oil, now at $136 a barrel also weighed on soy prices. July soybeans ended down 28 cents at $15.61 a bushel, off its low of $15.18-1/2. July slipped past its 20-day moving average of $15.53-3/4 on Tuesday. New-crop November ended 31-1/2 weaker at 15.29-1/2. The products followed. July soymeal ended $7.50 per ton lower at $425.10 and July soyoil closed 1.51 cent down at 63.38 cents per lb.
Commodity funds sold 5,000 soybean contracts, 2,000 soymeal and 3,000 soyoil, traders said. Volume was heavy. Estimated soybean trade was 173,452 futures and 29,777 options. Soymeal volume was seen at 61,882 futures and 4,064 options. Soyoil trade was pegged at 76,610 futures and 1,772 options.
Trading limits revert back to 70 cents for soybeans and $20 for soymeal since they did not see a limit move on the close. The US crop belt will have scattered showers and mild temperatures this week, promoting crop development, a DTN Meteorlogix forecaster said.
Crop conditions improved in the past week. USDA rated 59 percent of the soy crop good to excellent, up from 58 the week before. Traders expected 1-3 point improvement.
The controversial Argentina soy export tax, which has sparked a series of farmer protests and paralysed export trade there, was passed by the lower house of Congress by a slim margin over the weekend. The tax hike still needs the approval of the Senate.
Overnight, deliveries were light - a supportive feature for the markets. There was only one soymeal July delivery and no soybeans or soymeal. Weekly trade data from the Commodity Futures Trading Commission showed large speculators expanded their net longs in soybeans, soyoil and soymeal.
Large speculators increased their net long position in soybeans to 92,790 contracts in the week ended July 1, up 5,300 lots. In soyoil, large specs raised their net long position by 1,000 lots to 25,302 contracts. For soymeal futures/options combined, large speculators net long position increased by roughly 260 lots to 61,273. Spot basis bids for soybeans in the Midwest were firmer early Tuesday amid slow sales. Some dealers were offering basis-only contracts for soybeans.