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CBOT soyabeans bounces, ends firm on China buying talk

CHICAGO: Soyabeans futures at the Chicago Board of Trade rebounded from an early slide to three-week lows on Thursday and ended higher, sparked by talk of more Chinese buying activity in the world soybean market, traders said.

Soyabeans settled 1 to 6 cents per bushel higher, with on March up 4-3/4 at $5.04-1/2, after falling early as low as $4.96 for the contract's lowest price since $4.95 on Feb. 4. May futures rose 5-1/2 to $5.13-3/4.

CBOT soyabeans and corn sank initially on Thursday in a continued response to widespread rainfall across the US Midwest this week.

But soyabeans quickly bounced back as talk circulated that China may have bought 150,000 to 200,000 tonnes of soyabeans from either the US or South America over the past couple of days.

"There's definitely China buying, three to four cargoes total," said Dan Cekander, head of grain research for FIMAT Futures Inc. in Chicago. One barge cargo is the equivalent of roughly 50,000 tonnes of soyabeans.

"I think they were in the market. They were definitely bidding for beans overnight."

Over the previous two weeks, China was believed to have bought anywhere from 500,000 to 1 million tonnes of soyabeans from the US

The soybean purchases were likely made to feed China's domestic processing industry, Cekander said. Chinese processors were seeking beans to crush into meal to take advantage of sharply higher soymeal premiums, he added.

CBOT soyabeans were also supported by beliefs the market was oversold and due for a technical bounce after sharp declines on Wednesday. Expectations for Midwest rainfall helped drive soyabeans more than 13 cents lower Wednesday and continued to pressure prices early on Thursday.

Most of the Midwest was expected to receive rainfall of at least 1/4 inch by the end of the week, meteorologists said. Much of the eastern Midwest should get up to 1/2 inch of rain Thursday, and up to an inch was likely for western and central areas on Friday, Weather Services said.

News out of South America was also regarded as bearish. Earlier Thursday, Brazil's Agriculture Minister Pratini de Moraes said Brazil's 1999/2000 soybean crop should come in at a record 31.49 million tonnes, surpassing its 1997/98 record output of 31.36 million.

Funds were estimated to have sold about 2,000 contracts up to late trading. O'Connor & Co. sold about 1,100 on May contracts up to late trading, FIMAT Futures Inc. bought 200 March contracts, 600 May and 300 July, Commercial Grain bought 400 May, and Cargill Inc. sold 700 on May and 200 on July, floor sources said. Soybean futures volume during on Thursday's pit session was estimated by the CBOT at 65,000 contracts, compared to 91,047 on Wednesday.-Reuters