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CBOT soya tumbles on funds, easing weather concerns

CHICAGO: Soyabean futures at the Chicago Board of Trade sank Monday, the first trading session of 2000, as easing concerns over South American weather and commodity selling weighed on the soya complex, traders said.

Soyabeans settled 5-1/4 to 6-1/2 cents per bushel lower, with March contracts down 5-1/4 at $4.64-1/2, after rising as high as $4.74-3/4 shortly after the open.

Prices climbed in the early going in response to lighter-than-expected weekend rain in dry areas of South America's soyabean belt, particularly the state of Rio Grande do Sul in the southern part of Brazil. Argentina's major soyabean areas were mostly dry.

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 since the planting season began in mid-October.

But gains faded quickly amid forecasts for rain later this week in Rio Grande do Sul and other nearby states. Also, traders noted that other areas of Brazil received generous rains over the weekend.

According to Weather Services Corp., scattered showers and thunderstorms brought one-half inch to 2 inches of rain to the Parana and Mato Grosso states.

"Rio Grande do Sul didn't get much moisture, but every place else got 100 percent," said John Janney, vice president with Salomon Smith Barney Inc. at the CBOT.

Diminished weather concerns help trigger active fund selling, traders said, which gained momentum as several key chart levels were breached. March soyabeans closed below most major chart moving averages, including the 40-day (roughly $4.73 as of Monday's close) and 20-day ($4.68-1/4).

"It seemed like funds wanted to sell everything today," Janney added.

The next Commitments of Traders reports from the Commodity Futures Trading Commission was expected to show that speculative funds continued to hold a net long position in the soyabean market.

Traders estimated that the next reports, scheduled for later Monday, will show that noncommercial interests, which are primarily funds, held a net long of 10,000 contracts as of last week.

Early price gains were also tied to news late last week that the United States will donate approximately 500,000 tonnes of food aid to Russia, including 300,000 tonnes of hard red winter wheat. The other 200,000 tonnes will likely include soyabeans and vegetable oil, US officials said. Funds were estimated to have sold 2,000 contracts up to the last 45 minutes of trading.

Refco Inc. sold 700 March contracts, Iowa Grain sold 500 March, E.D. & F. Man International sold 400 March, RJ O'Brien & Associates bought 800 March, ADM Investor Services bought 500 March and Cargill bought 500 May.

Soyabean futures volume during Monday's pit session was estimated by the CBOT at 42,000 contracts, compared to 41,193 Thursday.

CBOT wheat ends mixed as Russia helps, soya hurts

Soft red winter wheat futures at the Chicago Board of Trade ended mixed on Monday, helped by news that the United States would donate food to beleaguered Russia and hurt by declines in soyabeans.

CBOT wheat futures settled 2-1/2 cents per bushel higher to 1-1/2 lower, with March off 1 cent at $2.47-1/2.

The market opened 1 to 2-3/4 cents per bushel higher on the first day of trading this year amid strength in soyabeans and new of the US food donation.

US officials said last Thursday the United States would donate about 500,000 tonnes of food to help feed the needy in Russia. The donation would include 300,000 tonnes of mostly hard red winter wheat that would go directly to the Russian government and be used for making bread.

Up to 200,000 tonnes of commodities including vegetable oil, soyabeans, rice, nonfat dry milk and wheat will be donated to private voluntary organisations, the officials said, adding that they hoped shipments would begin by March or April.

Russia in 1999 requested the United States for 5 million tonnes of food aid to supplement the more than 3 million tonnes Washington is providing Moscow.

"The Russian aid news was supportive early," said analyst Dan Cekander of FIMAT Futures. He added that wheat futures weakened in tandem with declines in soyabeans.

Soyabeans broke following forecasts of rain in the growing belts of Brazil and Argentina this week, the world's second and third largest producers after the United States.

Wheat futures were also weakened by forecasts for improved weather in much of the central US Plains by Tuesday that would be beneficial for the winter wheat crop there.

Three to 6 inches of snow were forecast from Tuesday and The colder weather will follow a week where Plains' temperatures climbed into the 60s and 70s degrees Fahrenheit.

Results of Pakistan's tender for 500,000 tonnes of soft white wheat are expected Tuesday, and some CBOT traders felt the United States was unlikely to win much of the business.

In November, Pakistan, rejecting all offers for US wheat, bought 500,000 tonnes of Australian wheat, due to lower freight costs to Pakistan from Australia compared with US quotes.

The market was also disappointed in the US export inspections of 15.012 million bushels in the week ended December 30 as issued by the US Department of Agriculture.

The tally was at the low end of trade estimates for 15 million to 23 million bushels.

Commodity funds sold 700 contracts. Rand Financial sold 500 March, Cargill Investor Services sold 300 March, Cargill Inc. sold 100 March, bought 800 March, Prudential Securities bought 400 March, sold 100 July.

CBOT wheat futures volume was estimated by the CBOT at 19,000 lots, compared to the 12,871 traded on Thursday.

Wheat options volume was estimated at 3,500.

CBOT corn ends lower as funds sells, soya weakens

Corn futures at the Chicago Board of Trade ended lower on Monday amid heavy commodity fund selling and pressure from declines in soyabeans, traders said.

CBOT corn settled 1-1/2 to 3-3/4 cents per bushel lower, with March off 3-3/4 at $2-3/4, its lowest close since touching $2.01-1/2 on Dec. 17.

Commodity funds sold 6,500 contracts on Monday, the first trading day of the year.

"Funds pounded corn," said analyst Dan Cekander of FIMAT Futures. "The weather was trying to be bullish early, and corn saw spill-over strength from beans, but that didn't last."

Corn futures started the session higher, lifted by strong gains in soyabeans amid less than expected weekend rains in Brazil and Argentina, the world's second and third largest producers after the United States.

But soyabeans faltered early in the session amid forecasts for rain in the two South American producers.

Corn was also supported early by strength in wheat futures amid news that the United States would donate 500,000 tonnes of food to beleaguered Russia.

Some 300,000 tonnes of hard red winter wheat would be part of the package. US officials said 200,000 tonnes will likely include soyabeans, vegetable oil and nonfat dry milk.

"Funds were mostly adding to shorts," one analyst said. "Ninety percent of the time, they act on technicals."

CBOT traders said corn futures could test the $2-level in trading on Tuesday. They said players would also be keeping a close eye on Argentina's corn crop.

Argentina's corn crop is nearing its critical pollination phase, when hot and dry conditions can cause problems that can ultimately reduce yields, meteorologists noted.

Temperatures in Argentina, a major corn producer and exporter, were expected to climb to the low- to mid-90s (degrees Fahrenheit) this week, meteorologists said.

The weekly US export inspections for corn in the week ended Dec. 30 totalled 27.826 million bushels, at the low end of trade estimates for 27 million to 38 million.

Carr Futures sold 1,000 March contracts, Merrill Lynch sold 1,000 March, O'Connor & Co sold 2,000 March, 500 May, ABN Amro sold 500 March, FCC Futures sold 800 March, bought 2,800 March, Cargill Inc. bought 500 March, 1,800 December.

Corn futures volume was estimated by the CBOT at 72,000 lots, compared to the 26,820 lots traded Thursday.

Corn options volume was estimated at 14,000 lots.-Reuters