20000206

CBOT soyabeans rebound, end firm on weather, China

CHICAGO: Soyabean futures at the Chicago Board of Trade bounced back from an early slide to 2-1/2-week lows and ended higher Friday, as talk of Chinese buying and lingering concerns over South American weather fuelled a recovery.

Soyabeans settled 2 to 6-1/2 cents per bushel higher, with March up 4-1/2 at $5.05-1/2, after falling as low as $4.95 in early trading to notch the contract's lowest price since Jan. 18.

China was believed to have purchased up to 110,000 tonnes of U.S. soyabeans over the past two days in the wake of a recent price slide, U.S. exporters said earlier Friday.

In South America, widespread rainfall across southern Brazil this week brought some relief to soyabean acreage suffering from persistent dryness. But traders said dry conditions remained a factor, as forecasts for the weekend and early next week turned generally drier across much of South America's soyabean belt.

"The southern corn and bean belt will be on the dry side through at least the middle portion of next week," Salomon Smith Barney Inc. meteorologists said Friday in a report on Brazil. "Temperatures will be warming up again to above-normal levels."

Soyabeans in Rio Grande do Sul, Brazil's third-leading soyabean growing state, will likely be stressed next week from drier and warmer conditions, Salomon Smith Barney added.

Argentina, the world's third-leading soyabean producing nation behind the United States and Brazil, was also expected to be mostly dry over the weekend and early next week.

"Argentina is trending drier and I think that's why we're turning firmer," said Dan Cekander, head of grain research for FIMAT Futures Inc. in Chicago. "There's still some time to take the top off the crop in Argentina."

In January, the U.S. Department of Agriculture projected 2000 Argentine soyabean production at 19 million tonnes, up from 18.5 million in a prior estimate and down from 19.9 million in 1999.

But dry conditions appear to have taken a toll in Argentina, as the USDA's attache in Argentina said Thursday it was reducing its forecast for the country's corn crop by 500,000 tonnes to 15 million tonnes.

In the pit, Refco bought 500 March, including about 300 near the close, ABN AMRO Inc. bought 500 May, Cargill Inc. sold 500 March and 100 May, Term Commodities sold 400 March and 100 May and O'Connor sold 300 March. Salomon Smith Barney Inc., O'Connor & Co. and E.D. & F. Man International were light buyers late.

-Reuters