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CBOT soya products drop sharply as soyabeans slide

CHICAGO: Soya product futures at the Chicago Board of Trade tumbled sharply on Monday in step with a steep slide in soyabean prices, as unexpected weekend rains in Brazil and prospects for more rain sent the soya complex reeling.

Soyameal sank to near two-week lows. Prices ended $3.40 to $4.50 per ton lower, with March down $4.40 at $161, the contract's lowest close since $159.30 on Jan. 19.

Soyaoil ended 0.35 to 0.55 cent per lb lower, with March down 0.46 at 16.58 cents. Commodity funds sold at least 1,700 soyaoil contracts and 500 meal contracts on the day, traders said.

Traders said the product markets largely followed CBOT soyabeans, which dropped 14 to 16 cents per bushel amid active fund selling and beliefs the weekend rainfall would improve the crop outlook in Brazil, the world's second-leading soyabean producing nation behind the United States.

Soyabean cropland in southern Brazil has suffered from below-normal precipitation since the start of planting in October. Rio Grande do Sul, in far southern Brazil, received 0.3 inch to 1.5 inches of rain Sunday, with coverage estimated at 60 to 70 percent of the state, said Joel Burgio, senior agricultural meteorologist for Weather Services.

Rio Grande do Sul is Brazil's third-leading soyabean growing state. The southern part of Parana, Brazil's leading soyabean state, received similar amounts and coverage, Burgio said. Forecasts this week carried additional chances for rainfall in Brazil.

A continued weak tone in the cash market remained a background factor for meal futures, said Mark Weidner, grain and oilseed analyst for Cargill Investor Services.

Rail and truck soyameal basis offers were mostly unchanged at U.S. Midwest markets on Monday, but dealers said demand was light. Dealers said feed mixers were pressured to buy soyameal because there were ample supplies of other feed ingredients.

"The U.S. domestic meal market has a softer tone, but that's nothing new. It's been like that for several weeks," he said. "We're responding to the (Brazil) rain and fund liquidation."

In the meal pit, Salomon Smith Barney sold 500 March contracts, Produce Grain sold 200 March and 200 May, E.D. & F. Man International bought 900 March and 200 May and Term Commodities bought 600 March and 300 May, floor sources said.

In soyaoil, Cargill Inc. sold 500 May, E.D. & F. Man sold 600 March and 200 May and FIMAT Futures bought 500 May and 400 July.

Soyameal volume during Monday's pit session was estimated by the CBOT at 19,000 contracts and soyaoil volume was estimated at 18,000 contracts.-Reuters