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CBOT soya ends weaker, erases Brazil-related gains

CHICAGO: Soyabean futures at the Chicago Board of Trade finished mostly lower on Monday, fading near the close after trading higher for much of the session on disappointment over weekend rainfall amounts in southern Brazil.

Soyabeans settled unchanged to 1 cent per bushel lower, with March, the most-active contract, down 1/4 at $5.05. Light commodity fund selling pressured prices near the close, traders said. Funds sold at least 400 soyabean contracts on the day.

Only light rains fell over the weekend in southern Brazil, including Rio Grande do Sul, Brazil's third-leading soyabean growing state, Weather Services Corp. said Monday.

That region still needs more rainfall to compensate for extended dryness since the start of the planting season in October and November, meteorologists said, but forecasts for this week held little chance of moisture.

Jon Davis, chief meteorologist for Salomon Smith Barney Inc., said a ridge of high pressure was expected to develop across southern Brazil this week, leading to dry and warmer conditions, with highs in the middle to upper 90s degrees Fahrenheit.

"Southern Brazil had a decent opportunity for rains during the past five days, but simply missed out as the big rains fell south, north and west of this area," Davis said in a report Monday.

"The opportunity for rain in southern Brazil is now over," Davis continued. "The dry pockets across this area...will likely (cause) some stress on the beans as the crop finishes up the pod development phase."

Not all forecasters agreed that conditions would be dry in southern Brazil this week. Brazil forecasters Somar Meteorologia said showers and thunderstorms should move through Rio Grande do Sul early this week, bringing more than an inch of rain on both Monday and Tuesday.

Brazil is the world's second-leading soyabean producing nation behind the United States.

Somar's outlook helped limit early price gains in soyabeans, traders said. The market was also pressured by March soyabeans' inability to break chart resistance around $5.13-5.14.

Near the close, Refco Inc. sold 200 March contracts and Iowa Grain sold 100 March, traders said. O'Connor and Co. sold 900 March, Term Commodities bought 400 May, Rand Financial Services bought 100 March and 400 May and TENCO bought 600 July.

In spreading, Term Commodities bought 400 March contracts and sold 400 May at a price difference of 9-1/2 cents. In options, Term bought 400 May $4.75 puts and sold 400 May $5.25 calls.-Reuters