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CBOT soyabeans end higher on renewed US weather fears

CHICAGO: Soyabean futures at the Chicago Board of Trade closed higher on Wednesday amid renewed concerns over long-term weather in the US Midwest following a private forecast scaling back rainfall amounts.

CBOT soyabeans settled 4 to 7 cents per bushel higher, with May up 4-1/4 at $5.31. November, which represents the first major new-crop marketing month, was up 5-1/4 at $5.54.

Soyabeans were also supported by commodity funds and a rally in soyaoil. Funds bought 4,300 soyaoil contracts on the day and 2,400 soyabean contracts.

"There is an extended forecast coming in with a little less moisture than previously forecast for the Midwest," said analyst Bob Lekberg of Goldenberg Hehmeyer.

CBOT traders said the forecaster was calling for normal to below-normal precipitation in its 8-to-14-day outlook.

The market has been on a roller-coaster ride since last week when the US government warned of a drought in the Midwest corn and soyabean growing region this spring.

The outlook was reinforced by last Thursday's National Weather Service 30-to-90-day outlook calling for warm and dry conditions in the spring and summer.

Players have been building a weather premium that took the market to six-month highs last week amid uncertainty over crop prospects following the drought warnings but have been less enthusiastic with the increased rainfall from the weekend.

Weekend rains in the Midwest battered futures on Monday, but the market closed mostly firm Tuesday on late short-covering. Soyabeans saw follow-through support early on Wednesday and gathered strength on news of the private forecast.

An unseasonably warm and dry winter had depleted soil moisture in many areas of the Midwest and timely rains were needed ahead of spring plantings and during germination.

Weather Services Corp. meteorologist Joel Burgio said significant rainfall is likely late this week in the Midwest.

"There will be showers in the west beginning Thursday and spreading through the east on Friday and Saturday," he said.

Burgio said from 0.25 to 1.00 inch of rain was likely to fall across the Midwest, with roughly 50 to 70 percent of the key corn and soyabean states receiving moisture.

Another wave of thundershowers was likely by the middle of next week, with the rainfall concentrated in the western and southern portion of the US Midwest.

WSC meanwhile said conditions were mostly favourable for harvesting in northern and central Brazil. Harvests are behind normal more because of a late crop rather than rain delays, it said.

Conditions are favourable for late pod filling and maturing soyabeans in the south, WSC added.

Brazilian analyst Safras e Mercado said on Monday that by March 17, 14 percent of the 1999/2000 soyabean crop had been harvested, compared to 20 percent a year ago and the five-year average of 22 percent.

Rand Financial bought 500 May, 200 July, 300 November contracts, Term Commodities, Cargill Investor Services each bought 200 May, RJ O'Brien bought 200 May, FIMAT Futures sold 600 May, 400 July.

Soyabean futures volume was estimated by the CBOT at 40,000 contracts, compared to 37,444 traded Tuesday.

Soyabean options volume was estimated at 13,000 contracts.-Reuters