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CBOT soyabeans end at 3-week lows on Argentina rain

CHICAGO: Soyabeans futures at the Chicago Board of Trade sank to the lowest levels in more than three weeks on Tuesday as rainfall this week in Argentina's soybean belt eased trade worries over dry conditions.

Soyabeans settled 4-1/2 to 6-1/4 cents per bushel lower, with March down 6-1/4 at $5.00-1/4, the contract's lowest close since Jan. 17. Commodity funds sold at least 1,500 contracts on the day.

Scattered rains of 1/4 to 1 inch fell in Argentina's corn and soybean areas over the past 24 hours, Weather Services Corp. said Tuesday.

"Overnight, there were some rains in Argentina that were construed to be pretty favourable," said Dale Gustafson, grains and oilseed analyst for Salomon Smith Barney Inc. in Chicago. "And we've got additional chances this week."

For the next five days, Weather Services projected scattered rains in Argentina's corn and soybean areas, with totals of 1/2 to 1 inch expected.

For Brazil, forecasters Somar Meteorologia projected 1/4 inch to 3/4 inch of rain per day from Tuesday to Friday in Parana, the nation's top soybean state. Rio Grande do Sul, Brazil's third-leading soybean state, should receive a little more than 1/2 inch in northern areas Wednesday and Thursday.

Analysts and meteorologists believe the rains so far this month have likely averted any potential crop disaster in South America. But they agreed that persistent dryness since the planting season in October and November has probably reduced yield potential to some degree.

Brazil and Argentina are the world's second- and third-leading soybean producing nations behind the United States.

The US Department of Agriculture projected Brazil's 2000 crop at 31 million tonnes and Argentina's at 19 million tonnes. But analysts said the effects of dryness may prompt the USDA to make a slight downward revision in one or both of those numbers in its next world supply and demand reports, scheduled for Friday.

CBOT soyabeans were technically weaker after pulling back sharply from the late-January highs, traders said, but March futures did close above $5.00, which is considered a key support area. Further support was eyed at $4.95.

March climbed to a four-month high of $5.29-1/2 on Jan. 28 but have tumbled since in the wake of rainfall in South America.

In the trading pit, Commercial Grain, O'Connor & Co., Prudential Securities and Cargill Investor Services each sold 200 March contracts, ADM Investor Services sold 200 March and 200 May, Cargill Inc. bought 400 March and sold 300 July and Rand Financial Services bought 300 March, floor sources said.-Reuters