20000317CBOT soyabeans end lower in technical pullback

CHICAGO: Soyabean futures at the Chicago Board of Trade closed mostly lower on Wednesday in a technical pullback from hefty gains this week fuelled by concern over dry weather in the U.S. Midwest growing region.

CBOT soyabeans settled 5 cents per bushel lower to 1 cent higher, with May down 5 cents at $5.25 and only very distant November ending higher.

Futures had climbed 19 to 23-1/2 cents per bushel during Monday and Tuesday, which took the May contract near seven-week highs amid talk of depleted soil moisture and the U.S. government forecast of a spring drought in the Midwest.

Midwest farmers are gearing up for spring sowings of corn and soyabeans and insufficient soil moisture could temper proper germination and development of the crops.

Putting a damper on the market on Wednesday were forecasts for rain in the Midwest on Thursday.

Some analysts and traders felt that while prices should reflect weather premiums amid uncertainty over crop prospects, it was still early in the season to be overly bullish.

"The market is weaker because there is some rain in the forecast," said analyst Jason Roose of U.S. Commodities.

Soyabeans were also weighed down by increased farmer selling in cash markets that increases hedge pressure on futures.

Soyabean basis bids across the Midwest were steady to 2 cents per bushel lower early Wednesday while CIF Gulf of Mexico soyabean basis values were steady to lower amid the increase in supply to market channels, grain dealers said.

Roose said that the gathering pace of the soyabean harvest in Brazil, the world's second largest producer after the United States, also burdened the market. "We can expect more competition as the harvest goes full force," he added.

Harvest delays in Brazil due to wet weather had a hand in lifting CBOT soyabeans this week.

Brazilian meteorologist Somar on Wednesday said the country's southern Rio Grande do Sul state would be without rain until next week while Parana had only slight chances of rain until Thursday after which it should be dry.

Rio Grande do Sul and Parana account for 45 percent of Brazil's total soyabean output.

For the Midwest, there were forecasts for rain Thursday in that could boost soil moisture that had been depleted by an unseasonably warm and dry winter.

Weather Services Corp. on Wednesday said there likely will be rain over the Ohio River Valley Thursday with light rain elsewhere in the Midwest and rain mixed with snow possible in northern Illinois and northwestern Indiana.

The rainfall amounts will range from 0.25 inch to 1.00 inch, with locally heavier amounts, WSC said. It will be dry and colder Friday and Saturday.

Meanwhile, Argentina's Agriculture Department raised the country's estimate for 1999/2000 soyabean output to 19.44 million tonnes from 18.7 million.

Technical traders cited support in the May contract at $5.24-1/2 and resistance at $5.33.

Through the day, commodity funds sold 500 contracts. Carr Futures sold 300 May, Cargill Inc. sold 100 July, 400 May, E D&F Man International sold 100 May, Rand Financial sold 200 May, FIMAT Futures bought 300 May, 100 July.

Soyabean futures volume was estimated by the CBOT at 56,000 lots, compared to 74,273 traded Tuesday.

Soyabean options volume was estimated at 17,000 lots.-Reuters