However, the market ended well above the days lows on late fund buying tied to short covering. "Beans were a dime lower to close a penny lower is a moral victory for the bulls," said Vice Lesbians, floor spokesman for A.G. Edwards and Co.
Pit sources said traders remained hesitant to hold large short positions in soya because of the potential for index fund buying to surface soon.
"It's all technical. They think there is going to be another wave of index fund buying" in the New Year, Lesbians said. A firm tone in nearby soyameal contracts also gave soyabean futures a bit of a lift, they said.
CBOT soya closed 3 cents per bushel lower to 1/4 higher, with January down 1-1/2 at $6.11-1/2 per bushel. March was down 1-1/4 at $6.23-3/4.
Traders said soyabean futures had moved up into overbought technical areas and were now vulnerable to a downward correction.
Recent showers in parts of the drier areas of South American soya regions also were weighing on prices. However, more rain is needed, especially in Argentina.
The nine-day relative strength index for January closed Friday at the overbought technical level of 72. Technical traders view an RSI of 70 or more as an overbought market.
Technical support in the January contract at $6.07 per bushel was broken, pushing the market into sell-stops and driving the contract to a session low of $6.02-3/4 per bushel.
Resistance was at $6.20-1/2. Traders said soya players continued to monitor South American weather patterns for direction. "They're talking about South American weather, but our weather guy says everything is fine," a soya trader said.
Meteorlogix weather on Tuesday said scattered showers moved through portions of Brazil's soya growing region over the weekend and a few light showers slipped through Argentina.
The Buenos Aires Grain Exchange said late on Monday that rains last weekend in parts of Argentina's farming region will benefit corn and soyabean seedlings but more water is needed as January's hot weather approaches.
Exports were quiet over the weekend and traders said the market continues to deal with almost daily talk that China is seeking or may have bought parcels of US soya.
USDA on Tuesday said 21.5 million bushels of soya were inspected for export last week, slightly above the 20.7 million bushels inspected the previous week.
Cash basis bids for soyabeans in the Midwest on Tuesday were mostly steady but river bids rose slightly as warmer weather eased traffic on inland waterways.
On Friday's CFTC commitments of trader's report for futures and options combined showed that as of last on Tuesday, large speculators were long 52,625 lots, up 4,760 from the previous report, and short 40,742 lots, down 15,276 lots.
Soyameal futures closed 90 cents per ton higher to 60 cents lower, with January up 40 at $203.80 per ton. The export arena included news India sold 36,000 tonnes of soyameal to China in new deals after Beijing cancelled contracts last month when demand was hit by bird flu fears.
On Friday's CFTC commitments of traders' report for futures and options combined showed that as of last on Tuesday, large speculators were long 28,764 lots, up 4,480 from the previous report, and short 14,798 lots, down 2,303 lots.
Soyaoil was 0.30 to 0.43 cent per lb. lower, with January down 0.30 at 20.98 cents per lb. Soyaoil also underwent a technical correction after the recent strong gains, traders said.
Malaysian palm oil futures closed flat to weak overnight. Traders in Kuala Lumpur said palm sagged, with the market weighed down by weakness in rival soyaoil prices.
Activity was light as players wound down trade ahead of the year-end. On Friday's CFTC commitments of trader's report for futures and options combined showed that as of last on Tuesday, large speculators were long 21,340 lots, down 1,052 from the previous report and short 49,523 lots, down 622 lots.