20000302CBOT soyabeans close up on funds, grain strength

CHICAGO: Soyabean futures at the Chicago Board of Trade finished higher on Tuesday amid commodity fund buying and spillover strength from corn and wheat.

CBOT soyabeans settled 3-1/2 to 7-1/2 cents per bushel, with May up 4-3/4 cents at $5.11.

The market opened lower, in line with trade expectations, amid the posting of heavy deliveries against the March contract on Tuesday. But prices recovered quickly.

Delivery notices totalled 1,223 lots, above expectations for 200 to 500 lots. Tuesday was first notice day for delivery notices against the March contract.

"Although the deliveries posted were heavy, those who did not want to deliver had already liquidated positions," said analyst Dan Cekander of FIMAT Futures.

He said the market was also helped higher by slow farmer selling in the US cash markets following recent declines in futures and strength in corn and wheat.

Wheat futures were strong from the opening bell amid the purchase of 50,000 tonnes of US wheat by China from the Pacific Northwest.

Light support was also seen in news that the pace of the soyabean harvest in Brazil, the world's second largest producer after the United States, was behind average.

Brazilian analysts Safras e Mercada said the country's soyabean harvest was showing its slowest progression since 1994. In a weekly report, it said farmers had only harvested about four percent of Brazil's total area planted to soyabeans by Feb. 25, against a five-year average of six percent for this stage in the crop cycle.

Weather Services Corp. early Tuesday said US soil moisture was mostly favourable ahead of the spring planting season, an improvement over recently dry conditions.

The Brazilian soyabean crop recently received a boost from much-needed moisture. Showers and thunderstorms of 0.25 to 1.00 inch and locally heavier amounts moved across Rio Grande do Sul into southern Parana with just a few light showers in areas to the north, Weather Services Corp. said.

Rain in Rio Grande do Sul was good for pod-filling soyabeans. However, dry weather was likely there over the next several days, leaving the area in need of more rainfall.

Elsewhere, moisture conditions were favourable for soyabeans with early harvests under way from Mato Grosso to parts of Parana, WSC said.

Technical traders cited support in the May contract at $5.02 and resistance at $5.10.

Through the close, commodity funds bought 1,000 contracts. Carr Futures bought 200 May, Merrill Lynch bought 200 March and 100 May, Stern bought 400 May, and E D&F Man International sold 200 July and 100 May.

Soyabean futures volume was estimated by the CBOT at 60,000 lots, compared to 70,601 traded on Monday.

Soyabean options volume was estimated at 10,000 lots.-Reuters