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CBOT soybeans slump on weaker Brazilian real, US harvest supplies

By Reuters News

CHICAGO, Oct 26 (Reuters) - Chicago Board of Trade soybean futures slumped sharply on Monday, at one point dropping more than 2%, as prices were weighed down by currency pressure and supplies from a record US harvest entering the market, market analysts said.

  • The Brazilian real weakened around 12% against the US dollar in spot trading as trading in Brazil got underway on Monday, and the country's stock exchange halted trading via a circuit breaker safety mechanism.

  • That came in the wake of President Luiz Inacio Lula da Silva's reelection, undoing bullish investor sentiment after his right-wing rival led the first round of voting earlier in the month.

  • Traders said that the surprising comeback was particularly bearish for US soybean futures, as Lula's past efforts to bolster China's purchasing of Brazilian soybeans had shown.

  • The weakness in the real also weighed on expectations for US soybean export demand, as a cheaper local currency can make Brazilian exports less expensive for global buyers, giving them a competitive edge over US supplies.

  • Earlier in the trading session, the most-active CBOT soybean contract on a continuous basis at one point dropped to $12.27-1/2 a bushel, the lowest price since August 25.

  • CBOT November soybeans closed 15-1/4 cents lower at $12.41-1/4 per bushel.

  • CBOT December soymeal ended $5.90 lower at $340.20 per ton.

  • CBOT December soyoil rose 0.18 cent to settle at 67.01 cents per pound.

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