20000325CBOT soyabeans slump on US weather, sluggish exports

CHICAGO: Soyabean futures at the Chicago Board of Trade closed sharply lower on Thursday amid a diminishing threat from US weather on crop prospects and under pressure from disappointing exports.

CBOT soyabeans settled 5 to 9 cents per bushel lower, with May off 9 cents at $5.22, its lowest close since falling to $5.09-3/4 on March 10. November, which represents the first major new-crop marketing month, was down 8 at $5.56.

The market also took pressure from improving weather conditions in Brazil, the world's second largest producer after the United States, that could help to speed the harvest delayed by rains in some key growing areas.

"The weather is getting wetter in the United States and drier in South America," said LFG trading specialist Ben George. "Weekly exports were at the low end."

Thursday's lower finish by soyabeans comes on the heels of two straight sessions of higher closes amid concerns over crop prospects following forecasts last week for drought this spring in Midwest corn and soyabean growing region.

The weather premium built by players following the drought warnings have been whittled away as weather conditions continue to improve following an unseasonably warm and dry winter that depleted soil moisture at many areas in the Midwest.

The weekly export sales report released before the market opened by the US Department of Agriculture was no help.

The USDA listed net export sales of US soyabeans during the week ended March 16 at 394,500 tonnes, within the range of estimates for 250,000 to 500,000 tonnes.

The net sales tally was equal to the week-ago total but 35 percent below the four-week average, according to the USDA.

China was listed as buying 126,400 tonnes, taking its total since the marketing year began on Sept. 1 to 3.154 million tonnes and making it the best customer so far.

Competition in the export market however was expected to heat up as the harvest pace in Brazil picks up and more of its soyabeans and its products become available for purchase.

"I would expect US soyabean and products exports to begin to scale back from May onward," one trader said, adding that China could head to South America if it intended to buy any more soyabeans because of competitive pricing.

Meanwhile, Weather Services Corp. meteorologist Joel Burgio said key corn and soyabean growing states in the Midwest should receive light showers late Thursday through Friday and additional rainfall was expected Sunday through Monday.

He said drier weather was likely Saturday but additional rainfall was probable beginning overnight Saturday with the heavier amounts expected in the western Corn Belt.

From 0.25 inch to 1.00 inch was seen in the western Corn Belt Saturday with scattered rainfall again likely Sunday and Monday moving from west to east across the Midwest, he said.

WSC said conditions were mostly favourable for harvesting in northern and central areas of Brazil, though harvests are behind normal mostly due to a late crop.

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. Fund sold 3,500 contracts. Refco Inc. sold 700 May, 100 November, 200 July contracts, O'Connor sold 500 May, ADM Investor Services sold 500 May, 100 July, Merrill Lynch sold 500 May and FIMAT Futures sold 500 May, 500 July.

Soyabean futures volume was estimated by the CBOT at 50,000 contracts, compared with 39,249 traded Wednesday.

Soyabean options volume was estimated at 18,000 contracts. -Reuters