SINGAPORE, July 26: US soybean futures slid 1.5 percent on Friday and were on track for the biggest weekly drop in nearly four years, hit by poor demand for old-crop supplies as buyers eye a bumper harvest.
New-crop December corn was little changed after four straight sessions of falls that were triggered by near-perfect weather conditions that have been aiding US crops.
End-users are beginning to quit buying expensive old-crop soybeans given the prospects for a record-sized crop and cheaper prices in the future due to the good US weather. An increase in farmers selling their remaining supplies of old-crop soybeans has also hurt prices.
Spot basis bids for corn and soybeans plummeted across the US Midwest on Thursday in a wave of declines typically seen during the autumn harvest.
The losses in soybean futures, which fell to their lowest level in more than a year, have been triggered by a selloff in soymeal which fell by its daily trading limit for a second day in a row on Thursday.
‘The only thing that was holding soybeans up to this point was the tightness in the soymeal market,’ said one Melbourne-based analyst. ‘Now we are seeing unwind of longs on the meal side and that paves the way for the whole soybean complex to go lower.’
Chicago Board of Trade August soybeans slid 1.5 percent to $13.35-1/4 a bushel, the lowest since June 2012 while the front-month soymeal contract slid 4.5 percent to $427.8 per short ton.
For the week, soybeans have lost more than 10 percent, the biggest decline since September 2009, while soymeal is down 11 percent, the most in nearly four years. Soybean prices have fallen nearly 16 percent over the past three weeks.
New-crop corn remained under pressure from forecasts of crop-friendly weather across the US grain belt.
Below-average temperatures and occasional showers through the end of July will aid the pollinating US corn crop and boost growth of the soybean crop, an agricultural meteorologist said.
New-crop December corn rose 0.1 percent to $4.79-1/4 a bushel after falling for four consecutive sessions and November soybeans lost 0.6 percent to $12.17 a bushel.
CBOT sources said that over the past three days commodity funds sold an estimated 31,000 contracts, or 155 million bushels of soybeans valued at roughly $2.356 billion based on Monday’s closing price of $15.20-1/4 for August.
Tight stocks of soybeans and soymeal due to drought-reduced production last season had led to huge buying of each commodity by commodity funds, leading to a large buildup of long positions in each futures market.
(AGENCIES)
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