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CBOT soyabeans end at 3-week high on China business

CHICAGO: Soyabean futures at the Chicago Board of Trade surged on Friday, as talk of more Chinese buying activity and technically inspired fund buying sent the market to three-week highs, traders said.

Soyabeans settled 2-3/4 to 7 cents per bushel higher, with March up 6-1/2 at $5.14-1/2, the contract's highest close since $5.23-1/2 on Jan. 28.

Talk circulated Friday that China may have bought as much as 850,000 to 1 million tonnes of soyabeans from the United States over the past seven to 10 days, more than estimates earlier this week.

"It was just ongoing talk about China buying," said Dale Gustafson, grains and oilseed analyst for Salomon Smith Barney Inc. "I think the quantities are getting significantly higher."

US exporters said the amount is likely closer to 500,000 to 600,000, and China was also said to be buying meal. China was likely buying the beans to feed its domestic crushing industry, analysts said, as China has imported relatively small amounts of soyameal and soyaoil recently.

Gustafson said the recent China buying spurt may be scaling up trade expectations for overall US soyabean exports this year.

"It's probably causing people to rethink their export outlook for the current (1999/2000) crop year, and carry-out is going down," Gustafson said.

Earlier this month, the USDA revised its forecast for 1999/2000 US soyabean exports higher by 25 million bushels to 890 million bushels. Gustafson sees a number around 905 million.

Soyabean gains were extended after the March contract broke chart resistance at $5.13 to $5.15, which triggered a wave of stop-loss buying that helped take it as high as $5.16, traders said. Funds were estimated to have bought at least 3,000 contracts on the day.

Weakness earlier in the session was attributed to beliefs that snowfall across much of the Midwest US would provide dry soils with some moisture relief.

Weather Services Corp. said that by Friday night, 4 to 8 inches of snow should blanket much of the Midwest, including southern and east-central Iowa, northern Illinois, northern Indiana and northwest Ohio. More precipitation was expected Monday and Tuesday.

Up to late trading, Refco Inc. bought 500 March contracts and 400 May, Iowa Grain bought 500 March, Farmers Commodities Corp. bought 300 May, R.J. O'Brien & Associates bought 500 May and sold 300 March and Prudential Securities sold 400 March, floor sources said.

In spreading, FIMAT Futures Inc. bought 1,400 May and sold 1,400 March at a price difference of 9-1/2 cents. In options, Term Commodities bought 600 April $5.30 calls.

Soyabean futures volume during Friday's pit session was estimated by the CBOT at 55,000 contracts, compared to 39,450 Thursday.-Reuters