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CBOT soya rebounds, ends up on talk of China buying

CHICAGO: Soyabean futures at the Chicago Board of Trade ended higher on Tuesday as talk of China snapping up more U.S. soyabeans sparked a rebound from initial declines.

Soyabeans settled 1/4 to 3-3/4 cents per bushel higher, with March, the most-active contract, up 3-3/4 at $5.08-3/4 after falling as low as $5.01-1/2 early in the session. Commercial firms were prominent buyers late, traders said.

China has been a relatively active soyabean buyer this month, traders said, moving in after prices pulled back sharply from the four-month highs set in January.

CBOT traders said trade talk had China buying anywhere from 300,000 to 600,000 tonnes of U.S. soyabeans over the past week.

"We came back on the talk of China buying," said Brian Scott, a trader with Chicago trading firm RJ O'Brien & Associates.

Traders in Asia expressed similar ideas on Chinese buying activity. "Demand (for soyabeans in China) is definitely there," an Asian trader said earlier Tuesday. "If Chicago (futures) continues to come down, they'll be buying more."

China represents one of the biggest markets for U.S. soyabeans. Last week, the U.S. Department of Agriculture said it increased its projection for Chinese soyabean imports during 1999/2000 to 4.8 million tonnes from a prior estimate of 4.3 million.

Soyabean prices sank initially Tuesday, partly on an improved crop outlook in South America in the wake of widespread rainfall over the past two weeks.

The rains brought some relief from dry conditions and largely eliminated fears of a significant soyabean production shortfall. But some areas, particularly southern Brazil, remained a source of concern due to a limited moisture outlook.

Weather Services Corp. projected mostly dry conditions the next five days for Rio Grande do Sul, Brazil's third-leading soyabean producing state, and an area that has suffered from persistent dryness.

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

Up to late trading, funds sold about 800 contracts, floor sources said.

Near the close, E.D. & F. Man International bought about 1,000 March contracts and Rand Financial Services bought 300 March, traders said.

Cargill bought at least 800 March and 600 May on the day, Term Commodities bought 300 May and RJ O'Brien & Associates sold 400 March and FIMAT Futures Inc. sold 500 March, 500 May and 500 July, floor sources said.

Soyabean futures volume during Tuesday's pit session was estimated by the CBOT at 42,000 contracts, compared with 36,780 Monday.-Reuters