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CBOT soyabeans end lower as China enthusiasm wanes

CHICAGO: Soyabean futures at the Chicago Board of Trade finished slightly lower Tuesday, fading from an early run to three-week highs amid a wetter outlook for the US Midwest and fading enthusiasm over a recent China buying spree.

Soyabeans settled 1/4 to 2-1/2 cents per bushel lower, with March down 1-1/2 at $5.13, after rising as high as $5.19-1/2 overnight for the contract's highest price since the same high on Jan. 31.

The market drew support initially on follow-through from last week, when prices climbed in response to active buying of US soyabeans by China. China may have bought up to 1 million tonnes of US soyabeans over the previous two weeks, some trade sources said, though others placed the amount closer to 500,000 to 600,000 tonnes.

But the price surge appeared to have closed off any additional Chinese buying interest this week, traders said. Traders in Asia said early Tuesday that Chinese soyabean buying was likely to dissipate because of a looming risk that imported supplies could flood a fragile domestic market.

The approaching harvest season for South America's soyabean crop also served to limit price upside for CBOT soyabeans, as did signs that crop conditions may improve for the upcoming US planting season.

Below-normal precipitation for much of the winter has resulted in unfavourably dry soils around the Midwest, fostering growing concerns as the spring planting season neared.

But Salomon Smith Barney Inc. meteorologist Jon Davis projected that 75 percent of the Midwest will receive rains of 0.2 to 1.1 inches by the end of the week. This would follow widespread snowfall last week that was expected to provide some relief for dry soils.

"The moisture is beneficial and will help to increase topsoil moisture reserves across the (corn and soyabean) belt," Davis said in a report Tuesday.

Early support was also tied to fund buying, with funds buying about 1,500 contracts up to late trading, floor sources said. E.D. & F. Man International bought 1,000 March contracts, Cargill Inc. bought 300 March and 400 May, O'Connor & Co. sold 300 March and 200 May and Salomon Smith Barney sold 400 March and bought 200 May.

Near the close, O'Connor sold another 300 May and 400 March.

Soyabean futures volume during Tuesday's pit session was estimated by the CBOT at 62,000 contracts, compared to 61,361 Friday.-Reuters