Soybean futures on the Chicago Board of Trade closed lower on Tuesday as crude oil fell and investors worried that a US bailout might not be enough to revive confidence in the global financial system, traders said. Concern about Washington's $700 billion plan to bail out troubled banks, the biggest rescue effort in any segment of the US economy since the Great Depression, is keeping the markets nervous and vulnerable to wide price swings.
Soybeans set back from Monday's rally, following crude oil. Crude saw its biggest ever one day price jump - up $25 a barrel at one point - on Monday as the US rescue plan was seen as inflationary.
On Tuesday crude set back, closing about $3 lower. Also bearish were prospects for Brazilian farmers to seed more soy acres in the coming season as a weakening Brazilian real versus the US dollar makes it more profitable for South American farmers to plant soybeans, traders said.
November soybeans ended 18 cents lower at $11.87 a bushel after falling nearly 37 cents early. Deferreds through July 2009 settled 16-3/4 to 18-1/4 weaker. October soyoil closed 1.81 cent down at 47.74 cents per lb; December ended 1.80 lower at 48.23. The front two soymeal months ended $2 a ton higher: October at $325.30 and December at $330.Soymeal rallied late amid meal/oil spreading, a reverse of Monday's trend when oil gained on meal as crude rallied.
Crude closed nearly $3 a barrel lower. Commodity funds sold 2,000 soybean contracts and 1,000 soyoil, and were about even in soymeal. There is no threat of a freeze for the Midwest this week, giving the late crop a chance to mature and improve yield potential, a DTN Meteorlogix forecaster said.
USDA reported late Monday that 44 percent of US soy crop dropping leaves, down from 64 percent five-year average. The government rated 57 percent of the soy crop as good to excellent as of September 21, unchanged from a week ago. Midwest basis bids for soybeans were weakening as the harvest pace is increasing, cash dealers said.