20000218CBOT soya ends weaker on forecasts, slower usage

CHICAGO: Soyabean futures at the Chicago Board of Trade finished mostly lower on Wednesday, as prospects for needed moisture in US crop areas and lower usage readings overshadowed talk of Chinese soyabean buying.

Soyabeans settled 3 cents per bushel higher to 1-1/4 lower, with March, the most actively traded contract, down 1-1/4 at $5.07-1/2.

Prices climbed late Tuesday and early Wednesday on talk that China may have purchased up to 500,000 tonnes of US soyabeans over the past week.

But the market could muster little upside momentum amid forecasts for widespread snowfall across the Midwest by the end of this week, traders said. Weather Services Corp. projected 4 to 8 inches of snow in parts of Iowa, Illinois and Indiana by Friday. Other areas should receive rain or freezing rain.

"We're looking for some reasonable rain coverage across the Midwest this week," said Dale Gustafson, grains and oilseed analyst for Salomon Smith Barney Inc.

The snow and rain could provide some moisture relief for dry Midwest soils, analysts said. The lack of significant precipitation through much of the fall and winter has become more of a concern as the spring corn and soyabean planting season neared.

Weaker soyabean usage readings stemmed from a monthly report from the National Oilseed Processors Association released Wednesday. NOPA said US soyabean crushings in January totalled 138.166 million bushels, down from 140.743 million in December but up from 133.883 million a year earlier.

"It indicates a little bit slower usage," Gustafson said.

China's apparent buying spree was in traders' focus initially Wednesday, as US exporters said Chinese buyers were looking for more soyabeans after buying about 400,000 tonnes last week. The US Agriculture Department said Wednesday that private exporters reported the sale of 110,000 tonnes of US soyabeans to China for delivery during 1999/2000.

With most of South America's soyabean crop still in the fields, the United States offers the only major source of soyabeans at this time, analysts noted.

China needs the soyabeans to feed its domestic crushing industry, analysts said, as import duties and lack of new government-issued import quotas have discouraged inflow of soyameal and soyaoil. China is one of the world's top soyabean importers.

Near the close Wednesday, RJ O'Brien & Associates bought 1,000 March contracts, traders said. Carr Futures sold 600 March contracts, O'Connor & Co. sold 400 March, and Iowa Grain and Produce Grain each bought 300 March, pit sources said. Soyabean futures volume during Wednesday's pit session was estimated by the CBOT at 35,000 contracts, compared to 44,811 Tuesday.-Reuters