COMMODITIES : Soybean Futures Fall; Lack of Demand Cited
Soybean futures prices fell sharply Monday on the Chicago Board of Trade, reflecting disappointment in the lack of foreign and domestic demand, analysts said. Grain futures prices also declined.
On other markets, gold and platinum futures retreated while silver rallied; energy futures rose; livestock and meat were mixed, and stock index futures advanced.
Several soybean contracts traded down the permitted limit of 30 cents a bushel during the session but recovered slightly before the close. Prices ended at their lowest levels since Aug. 23.
“A lot of bulls are throwing in the towel, backing away from the market,” said Mario Balletto, soybean market analyst in New York with Merrill Lynch Capital Markets Inc.
“There’s no buying showing up from users,” he said. “That’s still the big lament in the market.”
Mickey Luth, soybean analyst with Shearson Lehman Hutton Inc. in Chicago, termed export sales and shipments “lousy,” adding that the soybean market was beginning to feel pressure from the advancing harvest.
Broad Trading Range
Luth said the soybean market’s recent pattern of long, slow rallies followed by sharp breaks was typical of tight supply years. The Agriculture Department expects soybean production this year to be 23% below last year’s level.
The market has been trading in a broad range from $8 to $10 a bushel and is unlikely to go higher barring major problems with the Brazilian soybean crop, he said.
Corn and wheat futures followed the soybean market but losses in wheat were limited by talk of new export business with Morocco and Algeria, analysts said.
The USDA confirmed after the close that it had accepted bids from exporters on sales of 100,000 metric tons of subsidized wheat to Morocco and 50,000 metric tons to Algeria.
Wheat settled 1.5 to 6.75 cents lower, with the contract for delivery in September at $3.9625 a bushel; corn was 2 to 7.5 cents lower, with September at $2.7125 a bushel; oats were 4 to 6.5 cents lower, with September at $2.52 a bushel; soybeans were 12.75 to 28.5 cents lower, with September at $8.21 a bushel.
Gold futures prices declined for the fourth straight day on New York’s Commodity Exchange and posted new 18-month lows.
But gold appeared “oversold” from a technical standpoint, said Stephen Platt, an analyst in Chicago with Dean Witter Reynolds Inc.
“It looks like you’ve basically exhausted the downside momentum for now,” he said.
Precious metals futures all opened lower on Monday but drew support from a late firming of crude oil prices, Platt said. Silver closed higher; gold finished slightly lower and platinum was down sharply.
Platinum, traded on the New York Mercantile Exchange, settled $13.10 to $14.90 lower, with October at $503 an ounce.
Gold settled $2.70 to $3.10 lower, with October at $410.20 an ounce; silver was 0.5 cent to 3.5 cents higher, with September at $6.37 a ounce.
On the New York Mercantile Exchange, West Texas Intermediate crude oil settled 7 cents lower to 16 cents higher, with October at $14.73 a barrel; heating oil was 0.01 cent lower to 0.12 cent higher, with October at 41.36 cents a gallon; unleaded gasoline was 0.25 cent lower to 0.15 cent higher, with October at 44.24 cents a gallon.
Live cattle prices were mostly lower, with October and December deliveries hardest hit, in response to Friday’s monthly USDA cattle-on-feed report.
The report showed fewer marketings and fewer cattle placed on feedlots during August than the futures market had expected. The numbers suggested supplies of slaughter-ready cattle would remain plentiful through the end of the year, then tighten a bit early next year.
Hog futures also were mixed, partly in anticipation of the USDA’s quarterly hogs and pigs report, which will be released Sept. 30, analysts said, while frozen pork bellies declined in a technical sell-off.