Soybean futures dropped to a fresh 2017 low on Tuesday as oilseed prices tumbled through technical support levels.
Soybean contracts fell through the lower end of technical indicators on Friday, analysts said, which spurred follow-through selling this week. Regulatory data released late last week also showed managed funds increasing bets that oilseed prices would fall, coming to a total net short position of 62,000 contracts.
“The market is working on cleaning out any last remaining soybean bulls at the moment,” said Doug Bergman, director of the agricultural trading desk at RCM Alternatives in Chicago.
Soybean futures for July delivery fell 1.5% to $9.12 3/4 a bushel at the Chicago Board of Trade on Tuesday, the lowest close since early April 2016.
A U.S. Department of Agriculture announcement that private exporters sold 130,000 metric tons of soybeans to unknown buyers failed to excite traders, who are focused on the tough competition the U.S. will likely face in the coming season from South American exporters. Ongoing political turmoil in Brazil continues to concern traders, creating the potential to destabilize the Brazilian real and make that country’s oilseeds cheaper relative to American produce.
Grain futures also fell sharply Tuesday, as weather over the long Memorial Day weekend was less severe than expected. That prompted traders to peel back bets that excessive rain would derail some planting and harvesting.