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CBOT soya sink further on wetter S. America outlook

CHICAGO: Soyabean futures at the Chicago Board of Trade sank on Wednesday to the lowest levels in more than a week, as an improved South American crop outlook following recent rains continued to pull prices lower.

Soyabeans settled 1 to 4-1/2 cents per bushel lower, with March down 2-1/2 at $5.07-1/2, the contract's lowest close since Jan. 21.

Rainfall over the weekend and early this week in southern Brazil brought some relief to dry conditions there, meteorologists said, and more rain was forecast. Parts of Argentina's corn and soyabean belt also received rain over the past 24 hours.

Salomon Smith Barney Inc. meteorologists said that over the next seven days, 70 to 75 percent of Brazil's corn and soyabean belt will receive rainfall totalling 0.4 to 2 inches, with the bulk of it concentrated in the central and southern regions. Temperatures will be near normal during that period, with highs from 80 to 95 degrees Fahrenheit.

"The rain activity and cooler temps across the majority of the Brazil corn and bean belt during the next seven days will ease the stress on the crops after the dryness and warm temperatures of the past couple of weeks," Salomon Smith Barney said in a report.

"Furthermore, the upcoming rain systems are very timely, since they will be increasing soil moisture levels across the belt just prior to the critical pod development stage for beans," Salomon Smith Barney added.

Brazil and Argentina are the world's second- and third-leading soyabean producing nations behind the United States. Both have had drier than normal conditions in key areas since the planting season began in mid-October.

The two countries are expected to produce a combined 50-million-tonne soyabean crop in 1999/2000, or 32.5 percent of projected world soyabean production, based on U.S. Department of Agriculture estimates.

Mild commodity fund buying provided support until prices eased late, traders said. Funds bought about 600 soyabean contracts up to late trading. Funds still hold a sizable net long position in soyabeans after buying actively during the rally last month, traders said.

RJ O'Brien & Associates sold 500 March contracts up to late trading, FIMAT Futures Inc. sold 300 March and 200 November and bought 300 May, TENCO Commercial Grain bought 600 March, Cargill Inc. bought 300 March and E.D. & F. Man International bought 300 March and 100 May, pit sources said.

Soyabean futures volume during Wednesday's pit session was estimated by the CBOT at 45,000 contracts.-Reuters