US soybean futures on the Chicago Board of Trade sank to a five-month low on Friday on follow-through weakness due to falling crude, a firm dollar and beneficial Midwest rains for filling soy, traders said. "We went up on solid demand and rising outside markets and we're slipping on falling outside markets and demand on the export front that is slipping a bit," said Don Roose, analyst with US Commodities.
The market gapped lower at the open, setting up the technical sell-off. Nearby soybeans closed below $11 a bushel for the first time in four weeks - September ended down 54 cents at $11.80 a bushel. More active new-crop November closed 58 lower at $11.77. September soymeal ended $14.40 per ton lower at $341; September soyoil closed 1.35 cent down at 48.18.
Funds sold roughly 8,000-9,000 soybean contracts. Crude oil closed nearly $2 a barrel lower at $106. Dollar edged higher versus the euro but retreated from 11-month top on weak US Labour data. Filling soybeans aided by this week's rain, with heaviest amounts in Illinois; lighter amounts in Indiana and Ohio.
Uncertainty loomed in extended forecasts as Hurricane Ike churns; one model indicted colder temperatures next week and the week of September 14, a DTN Meteorlogix forecaster said. Weekly export sales were disappointing for soybeans and a little supportive for the products, especially soymeal.
USDA said private exporters reported the sale of 110,000 tonnes of US soybeans to South Korea for 2008/09 delivery. USDA reported export sales of US soybeans in the latest week at 280,500 tonnes (44,200 for 2007/08 and 236,300 for 2008/09), near the low end of trade estimates for 250,000 to 500,000 tonnes.
USDA reported export sales of US soymeal in the latest week at 147,700 tonnes (101,000 for 2007/08 and 46,700 for 2008/09), above trade estimates for 30,000 to 130,000 tonnes. USDA reported export sales of US soyoil in the latest week at 7,900 tonnes (all 2007/08), within trade estimates for zero to 15,000 tonnes. Traders said analytical firm Informa Economics projected US soy crop at 3.035 billion bushels, up from USDA's 2.973 billion bushel forecast.
Research firm Allendale Inc forecast US 2008 soybean production at 2.818 billion bushels, yield at 38.43 bushels per acre, based on farmer survey. USDA will issue its next crop forecast on September 12. Light September soybean deliveries of three lots overnight and no soymeal were signs of firm cash markets, traders said.