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CBOT soyabeans end mostly firm, late short covering

CHICAGO: Soyabean futures at the Chicago Board of Trade closed mostly firm on Tuesday amid late short covering after spending most of the session in negative territory under pressure from improving U.S. Midwest weather.

CBOT soyabeans settled 1 cent per bushel higher to 1 cent lower, with May up 1 cent at $5.26-3/4.

"There was some local short covering toward the close," a CBOT trader said, adding that the absence of commodity fund selling, unlike in wheat and corn, also helped the market.

Futures opened lower in follow-through selling from Monday, when soyabeans ended 6-1/2 to 11-3/4 cents lower, amid improving weather conditions in the Midwest corn and soyabean belt.

Monday's plunge was triggered by heavier-than-expected rain in the Midwest over the weekend and forecasts for more this week that helped ease concerns raised by warnings last week of drought this spring and summer in the key growing region.

With the near-term improvement in the weather, players were whittling away the premium they had built into the market last week amid uncertainty over crop prospects.

"There was rain in the Midwest over the weekend and there are chances for more this week," said Don Roose, president of U.S. Commodities, when soyabeans were posting losses Tuesday.

He also said that areas where the soyabean harvest had been delayed in Brazil, the world's second largest producer after the United States, were beginning to dry out.

Brazil is a keen competitor of the United States in world markets for soyabeans and their products, soyameal and soyaoil. Any pickup in its harvest pace would weigh on U.S. exports.

Brazilian analyst Safras e Mercado said on Monday that the Brazilian harvest was well behind the usual pace.

It said that by March 17, 14 percent of the 1999/2000 soyabean crop had been harvested compared to a reported 20 percent a year ago and the five-year average of 22 percent.

Meanwhile, Weather Services Corp. meteorologist Joel Burgio said on Tuesday that weather patterns now through at least the end of next week indicate improved spring seeding conditions and a potential quick start for corn and soyabean plantings.

"The rain and potential for more rain next week makes it look good for spring field work and plantings," he said.

The extended outlook from Sunday through Thursday was for above normal temperatures in key U.S. corn and soyabean states and near to above normal rainfall with the heavier rains likely in the western and southern portion of the Midwest, he said.

Monday's National Weather Services six- to 10-day outlook was for normal to above-normal temperatures and rainfall in the Midwest from Sunday through Thursday.

An unseasonably warm and dry winter has depleted soil moisture in many areas of the Midwest and timely rains were needed ahead and after seedings.

Commodity funds bought 400 contracts. FIMAT Futures bought 800 May, 400 July, RJ O'Brien bought 200 May, 100 July, Rand Financial bought 200 July, ADM Investor Services sold 100 May, 600 July, Cargill Inc. sold 200 May.

Soyabean futures volume was estimated by the CBOT at 42,000 contracts, compared to 49,849 traded Monday.

Soyabean options volume was estimated at 14,000 contracts.ÑReuters