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CBOT soyabeans end higher as funds spark late rally

CHICAGO: Soyabean futures at the Chicago Board of Trade ended mostly higher Thursday as short covering by commodity funds and commercials sparked a late rally.

CBOT soyabeans settled 5 cents per bushel higher to 1/2 cent lower, with May up 4-1/4 at $5.10. Futures had spent most of the day in negative territory amid poor weekly US export sales.

Funds bought 1,500 contracts through the day.

"Beans had no reason to rally, but they rallied. Funds and commercials took the market higher," said Vic Lespinasse, floor commentator for AG Edwards & Co.

The US Department of Agriculture, in its weekly report released before the market opened, listed net export sales of US soyabeans during the week ended Feb. 24 at 558,000 tonnes, which was at the low end of trade estimates for 450,000 to 1,000,000 tonnes.

The tally was 43 percent below the previous week and 26 percent below the four-week average, according to the USDA.

The report also listed the sale of 136,800 tonnes of US soyabeans to China, bringing Beijing's total purchases of 1999/2000 US soyabeans to 2,795,400 tonnes as of Feb. 24 of which 841,700 tonnes were bought during the past month.

"The export sales numbers were a little disappointing," said analyst Sid Love of Joe Kropf and Sid Love Consulting.

He also attributed some of the early weakness in soyabeans to an announcement on Wednesday by agribusiness giant Archer Daniels Midland Co. to cut back its soyabean crushing activity indefinitely from March 13 because of poor profit margins.

"A slow down in crushing would mean less demand for soyabeans," Love said.

The company said slow Asian demand and large South American oilseed crops had contributed to its decision to cut back on soyabean crushing, a process that yields soyameal, a heavily used livestock feed supplement, and soyaoil, a food ingredient.

On the US weather front, conditions in the US Midwest and South America were improving.

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

In Brazil, WSC said dryness and some heat in February damaged some of the soyabean crop in Rio Grande Do Sul but a recent increase in rain and more rain on the way improves conditions for crops. Generally favourable conditions for pod filling beans were noted elsewhere. Harvests are underway in the north but with some delays. Prudential Securities bought 600 May contracts, Refco Inc. bought 1,100 May, sold 200 July, Cargill Inc. bought 600 May, 100 July, 400 November, sold 1,000 May.

Soyabean futures volume was estimated by the CBOT at 60,000 lots, compared with 54,394 traded on Wednesday.

Soyabean options volume was estimated at 15,000 lots. -Reuters