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CBOT soyabeans sink near 6-week low on wet forecast

CHICAGO: Soyabean futures at the Chicago Board of Trade tumbled sharply Wednesday, ending at the lowest levels in nearly six weeks as a wetter outlook for the US Midwest crop belt eased dryness concerns and fuelled heavy commodity fund selling.

Soyabeans settled 10-1/2 to 15-1/2 cents per bushel lower, with March down 13-1/4 at $4.99-3/4, the contract's lowest close since $4.96-1/4 on Jan. 14. May futures fell 14-1/4 to $5.08-1/4. Funds were estimated to have sold at least 3,000 contracts on the day.

Much-needed rain was expected across most of the Midwest by the end of this week. Eastern Nebraska and western Iowa should receive 1/2 to 1-1/2 inch of rain by late Wednesday, according to Brad Nesiba, a meteorologist with Strategic Weather Services.

"By the end of the week, we are looking at 100 percent coverage of the western corn belt of at least a quarter-inch," Nesiba told Reuters.

Wednesday's precipitation and precipitation expected soon after should provide Midwest soils with a moisture boost after a relatively dry fall and winter, meteorologists said. Persistent dryness was of increasing concern as the spring planting season for corn and soyabeans neared.

"We continued to shove any concerns aside about developing drought," said Robert Lekberg, grain and oilseed analyst for Goldenberg, Hehmeyer & Co. in Chicago. "We're further recharging soil levels."

Forecasters now expect a wet weather pattern to replace the dry one that has been in place since last summer. "We are going to have to call it a wet weather pattern," said Harvey Freese, a meteorologist with Freese-Notis Weather. "It is a definite shift in the weather pattern."

Eroding technical patterns triggered additional fund selling, traders said, as the soyabean market breached some key chart areas. Funds have held a large net long position in the soyabean futures market for several weeks, and fund selling Wednesday was primarily tied to long liquidation, traders said.

The upcoming delivery period for March futures also contributed to selling, traders said. March CBOT futures enter delivery Feb. 29.

March futures fell as low as $4.99-1/2, and still have support around $4.94-4.95, traders said.

Near the close, Refco Inc. and Salomon Smith Barney Inc. each sold 600 May contracts, floor sources said.

Up to late trading, FIMAT Futures Inc. and Rand Financial Services each sold 600 May contracts, Salomon Smith Barney sold 500 May, ADM Investor Services bought 1,000 March, Cargill Inc. bought 400 March and 200 each in May, July and November and TENCO Commercial Grain bought 400 May, pit sources said.

Soyabean futures volume during Wednesday's pit session was estimated by the CBOT at 78,000 contracts, compared to 71,993 Tuesday.-Reuters