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CBOT soysbeans tumbles to 6-week low on funds, USDA data

CHICAGO: Soyabeans futures at the Chicago Board of Trade sank sharply on Friday to six-week lows as an improved crop outlook in the US Midwest and a sharply higher forecast for US soybean supplies helped fuel heavy fund selling, traders said.

Soyabeans settled 6-1/2 to 9-3/4 cents per bushel lower, with on March down 7-1/2 at $4.97, the contract's lowest close since $4.96-1/4 on Jan. 14. May futures fell 8-1/4 to $5.05-1/2.

Widespread rainfall in the Midwest this week provided a boost for dry soils and eased trade concerns that this year's corn and soybean crops would be planted in unfavourably dry conditions.

US Department of Agriculture crop projections released Friday further propelled selling interest, traders said. The USDA, in numbers released at its annual outlook conference, projected 2000/01 ending US soybean stocks at 510 million bushels, up from an estimated 345 million for the end of 1999/2000.

The USDA projected 2000 planted US soybean acreage at a record 75 million acres, up from 73.8 million in 1999, and production at 2.96 billion bushels, up from 2.643 billion.

The weather and USDA numbers combined to overshadow relatively strong weekly export readings, said Dale Gustafson, grains and oilseed analyst for Salomon Smith Barney Inc. in Chicago.

"Other than the export sales, the news was negative today," Gustafson said. "And once we got going, it was just a matter of more fund liquidation."

Funds were estimated to have sold at least 8,000 soybean contracts on the day, and were also active sellers in most other CBOT markets. Fund selling accelerated as key chart levels in soyabeans were broken, traders said. Funds have held a sizable net long position in soybean futures for several weeks, traders added.

Doane Agricultural Services analyst Richard Potorff, speaking at the USDA outlook forum on Friday, said that with normal weather and large sowings, US farmers could flood the soybean market and double the US ending stocks. He said market prices could drop to the low $4 range.

The USDA's weekly export sales report on Friday reflected fairly strong export demand, and also confirmed talk of recent Chinese buying. The USDA said net US soybean sales were 991,300 tonnes for the week ended on Feb. 17, 49 percent above the previous week and 82 percent above the four-week average. China, at 565,300 tonnes, was the largest buyer listed by the USDA for the latest week.

In the pit, Cargill Investor Services sold 1,200 on March contracts, Iowa Grain sold 600 on May, Refco Inc. sold 1,500 on May and Term Commodities bought 2,000 on May, floor sources said.Soybean futures volume during on Friday's pit session was estimated by the CBOT at 75,000 contracts, compared to 68,382 on Thursday.-Reuters