What Happened To Soybeans On Friday?

12/05/12 -- It looks like Friday was a sharp reminder that no matter what the fundamentals say, when the elephants all stampede for the exit door en masse there's only one thing gonna happen.

What appears to have startled Dumbo this week is the news that a leading US bank were said to have lost USD2 billion, maybe more, on credit default swaps in just six weeks.

The suggestion is that they were selling "paper" soybeans at whatever price they could get on Friday to recoup some of those losses. As ever, when the price drops sharply computer generated stop-losses kick in and the little guys also get sucked into the vortex.

Separately, it is interesting to note that Fortress Investment Group announced Thursday that they were closing their commodities fund, which has lost 12.57% in first four months of year, later this month.

Meanwhile front month May 12 Chicago soybeans are 99 cents lower than where they finished April yet South American production estimates and US ending stocks have been lowered and China/unknown has bought US soybeans virtually every day  since then!