Some say they have seen a head and shoulders.
Darrell Holaday, at broker Country Futures, said that "a
bear flag formation became very evident".
Whatever, either pattern in the soybean chart was a negative
sign which added to traders' enthusiasm to sell the oilseed on Thursday.
Remembering that funds have a net long position in the
oilseed so large "it looks not manageable", Brian Henry at Benson Quinn
"The corn long position is probably manageable, but very,
very large," and the wheat net long the most easy for the market to digest on a
'Not good news'
And there were more than chart signals behind investors'
appetite for sales, especially in soybeans, which for Chicago's November contract
tumbled to their lowest close in more than a month.
External markets hardly helped, with risk assets depressed
by HSBC data showing Chinese manufacturing activity still slowing, if at a
slightly lower pace than last month.
Darrell Holaday at Country Futures said: "Seven straight
months of negative manufacturing data out of China. That is not good news for
the soybean complex," with the country the top importer of the oilseed.
fell to their lowest since February 2009, and eurozone data hardly improved the
mood, showing private sector activity dropping at its fastest pace in three
The safe haven of the dollar
added 0.4% against a basket of currencies, an indicator of a cautious mood,
besides lowering the affordability of dollar-denominated exports, such as many
'Yields are better
But there were fundamental negatives for soybeans too,
helping them capture notable trading volumes compared with corn and wheat, as
liquidation took hold, with funds selling an estimated 16,000 contracts.
The over-riding depressant is of forecast-beating US yield
results (albeit ahead of low forecasts, given the summer drought), at a time
when harvest pressure is weighing anyway on values, as a once-a-year spike in
supplies comes onstream.
"There is little doubt that the feeling in the industry is
that soybean yields are better than expected," Mr Holaday said.
Richard Feltes at RJ O'Brien said that it appears currently
that "the trade is worried more about the large fund long, harvest hedge
pressure and better-than-expected soy yields than it is about running out of
beans next spring".
Where are the
And the demand hopes behind the last session's rally dried
OK, US weekly soybean export sales were solid, at 712,000
tonnes, towards the upper end of market expectations.
But that was for last week. The dearth of official confirmation
of Chinese buying since, despite plenty of talk of purchases on the break in
prices earlier this week, stoked many a doubt.
Rumours of purchases of 2-10 cargoes "have been circulating for
several days and we have yet to see any announcements on the daily sales report",
Paul Georgy at broker Allendale said.
Soybeans for November dropped 3.0% to $16.18 ¾ a bushel.
Mixed demand picture
That made corn
look relatively upbeat, in dropping only 1.4% to $7.46 a bushel.
And this despite another week of dismal US export sales data,
of a little under 70,000 tonnes.
"Corn sales need to average 430,000 tonnes to meet the USDA
goal" for 2012-13, US Commodities said.
"Export corn remains non-competitive. South American corn is
well under US export values."
Still, at least there are signs of hope in domestic demand,
with ethanol production "now above breakeven", meaning "ethanol plants are
coming back online after being idled earlier in the summer", the broker said.
"Egg sets and broiler placements are not showing
liquidation. Basis levels on corn are firming, up $0.15 a bushel across the Corn
Belt in the last week."
Still, it was left to wheat
again to show the best performance among Chicago,s big three crops, closing
down a modest 0.2% at $8.79 ½ a bushel for December delivery.
Besides the lack of a fund overhang, US weekly export sales,
at 488,000 tonnes, topped expectations.
And the weather outlook was "somewhat supportive", Mr Feltes
noted, showing "lighter showers forecast across Western Australia, and prospects
for continued dryness for the north west quadrant of the US hard red winter
wheat belt", signalling some challenge to ideas of a rise in US sowings of the grain.
Furthermore, Russian wheat seems to be losing export competitiveness too, at least against some non-US origins.
In Europe, Paris wheat showed small gains, adding 0.1% to
E261.25 a tonne, while its London peer eased 0.6% to £205.10 a tonne, despite a downgrade by consultants Adas in their estimate of the UK wheat crop, potentially to a 20-year low.
'Triggered sell stops'
Among soft commodities, cotton
suffered, as might be expected as an industrial commodity in an atmosphere of
enhanced economic worries
New York's December lot dropped 1.6% to 75.22 cents a pound.
And New York arabica coffee
for December dropped by 3.3% to 161.60 cents per pound, in part on a technical
move, after the lot's short-covering rebound earlier in the week failed again
to find any echoes.
"After what initially looked like a pullback from the short covering
rally seen in previous weeks, now looks like a failure to move any higher as
prices break the 171.70-cents-a-pound support level," Sucden Financial said.
"This move triggered sell stops and the market continued to
However, raw sugar rose, boosted by talk of rain
slowing the revival in the cane crush in Brazil's key Centre South region.
Furthermore, trade association Unica put dampeners on
Czarnikow forecasts of lower prices yet by cutting its forecast for Centre
South sugar output in 2012-13 to 32.7m tonnes.
Raw sugar for October added 1.3% to 19.21 cents a pound.