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CBOT soyabeans end lower amid favorable weather

CHICAGO: Soyabean futures at the Chicago Board of Trade ended lower on Wednesday in a late price break as favourable crop weather overwhelmed early technical support.

CBOT soyabeans settled 2 to 5-3/4 cents per bushel lower, with May down 4-3/4 at $5.06-1/4. The market had been 3/4 to 3 cents higher at midsession.

Some of the early strength was attributed to slow farmer selling in US cash markets.

"Crop weather in the US and South America are favourable. The fear in the market is of larger areas being planted in South America, leading to stiff competition for the US," said Don Roose, president of US Commodities.

The slump was also pegged to the May contract's failure to breach resistance at $5.14-1/4. The contract posted an intraday high of $5.14.

Weather Services Corp. said early Wednesday US soil moisture is mostly favourable at this time, providing a better outlook for spring planting after previous dryness.

There is a chance of rain in the south Friday with a slight chance of light rain or snow in central areas.

Brazilian meteorologists Somar said the country's key southern soyabean growing states of Rio Grande do Sul and Parana should see showers over the near term.

Northern areas of Rio Grande do Sul, Brazil's third largest soyabean state, would get 30 millimetres Wednesday, with rains easing through the next five days. The state has suffered from drought since September, especially in its western areas.

Rio Grande do Sul received more than 40 mm of moisture since Saturday, Somar data showed.

High daytime temperatures in Mato Grosso, the second largest soyabean producer, would continue to bring scattered afternoon showers until the weekend. Thunderstorms had drenched the state with 73 mm of rain in the last 24 hours, Somar said.

Parana, the top soyabean producer, should benefit from an expected 65 mm of rain over the next three days. Farmers in the state have reported only 12 mm since Saturday and none on Tuesday, though regular rainfall in January brought the state's average soil moisture levels back to normal.

The favourable crop weather coupled with heavy deliveries against the March contract saw soyabean futures opening weak.

Heavier-than-expected delivery notices against the March surfaced on Tuesday, first notice day, and Wednesday's deliveries stayed strong at 1,286 lots.

Traders said there was also some caution in the market over future purchases of soyabeans by China following its recent shopping spree in the United States.

"There is a fear in the market that China could turn to South America for soyabeans for late March or April shipments," one trader said. But the trader added that talk of Chinese purchases quieted down after the recent flurry.

Through the close, commodity funds bought 600 contracts, FIMAT Futures bought 100 July and 600 May and sold 100 March, Cargill Inc. bought 300 March, 400 May, and 400 July, and Produce Grain bought 100 May, 200 November and 200 July.

Soyabean futures volume was estimated by the CBOT at 53,000 lots, compared with 61,555 traded on Tuesday.

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