20000203CBOT soyabeans end firmer in technical recovery

CHICAGO: Soyabean futures at the Chicago Board of Trade finished modestly higher on Tuesday, trimming declines shortly before the close in what traders said was a technical recovery from sharp losses Monday.

Soyabeans settled unchanged to 3-1/2 cents per bushel higher, with March up 2 at $5.10, after earlier falling as low as $5.03 for the contract's lowest price since $5.01 on Jan. 21.

CBOT soyabeans plunged 14 to 16 cents on Monday in response to unexpected weekend rains in southern Brazil and prospects for more this week.

Forecasters on Tuesday continued to project better rainfall possibilities for Brazil later this week. But traders and analysts said losses Monday were overdone and some bounce was warranted.

"It was more of a consolidation after yesterday's sell off," said Robert Lekberg, grain and oilseed analyst for Goldenberg, Hehmeyer & Co., referring to Tuesday's price action.

Lekberg said persistent dryness has likely already reduced soyabean yields for this year's South American crop. But South America can still have relatively strong production if timely rains fall this month, when much of the crop will be going through critical reproductive phases.

"We've trimmed the best potential in South America," Lekberg said. "But we're getting rain, and it does look like the showers are of a sustaining nature."

The U.S. Department of Agriculture estimated 2000 soyabean production in Brazil, the world's second-leading soyabean grower behind the United States, at 31 million tonnes, equal with last year's crop. But many analysts believe the crop is closer to 29 or 30 million tonnes.

Joel Burgio, senior agricultural meteorologist with Weather Services Corp., forecast one-tenth to one-half inch of rain on Thursday for Rio Grande do Sul, one of Brazil's leading soyabean producing states and also one of its driest.

Mostly dry conditions were projected in Rio Grande do Sul for Friday, but the weekend should bring one-half to 1 inch of rain, he said.

Technical analysts placed support for March soyabeans around the $5.00 area. A close below that level could target a drop to $4.91, one analyst said.

Late short covering helped soyabeans climb in late trading, floor sources said. E.D. & F. Man International and Lee B. Stern each bought about 300 March contracts shortly before the close.

Earlier, Refco Inc. sold 200 March, 600 May and 200 July, pit sources said, TENCO Commercial Grain sold 200 March and Prudential Securities and Salomon Smith Barney Inc. each sold 300 March. Soyabean futures volume during Tuesday's pit session was estimated by the CBOT at 45,000 contracts.-Reuters