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CBOT soyabeans sink on wetter S. America outlook

CHICAGO: Soyabean futures at the Chicago Board of Trade finished lower Monday as a wetter outlook for South America's soyabean belt eased some concerns over dryness, traders said.

Soyabeans settled 4 to 5-1/2 cents per bushel lower, with March contracts down 5-1/4 at $4.73-1/2.

Prices sank from the outset in the wake of forecasts for improved rainfall chances this week in some of the drier areas of South America, including the state of Rio Grande do Sul in southern Brazil.

Weather Services Corp. projected episodes of scattered light showers in Rio Grande do Sul and southwest Parana over the next 24 to 48 hours, and scattered showers and thunderstorms Wednesday through Friday totalling 1/2 to 1-1/2 inch.

Temperatures were seen near to above normal the next two to three days, with highs in the 90s (degrees Fahrenheit).

"The whole floor started lower because of an improved outlook in South America," said Victor Lespinasse, floor commentator for AG Edwards & Sons Inc. "With the improved outlook in South America, beans took the brunt of the pressure."

Commodity fund buying contributed to a modest rebound earlier in the session, but was not active enough to completely erase declines, Lespinasse said.

Funds were estimated to have bought about 1,000 soyabean contracts up to late trading, traders said.

Weather Services cautioned that additional rains were necessary in South America to completely alleviate dry soils, which have plagued many areas since the planting season began in mid-October. The soyabean crop was approaching its critical reproductive phase, when moisture needs are greatest.

"More rain is needed for developing soyabeans in the major growing areas of Rio Grande do Sul, parts of Parana and the southern Mato Grosso to prevent yield losses," Weather Services said.

Brazil and Argentina are the world's second- and third-leading soyabean producing nations behind the United States.

The weather outlook this week for South America took a bearish turn for soyabean prices, but traders anticipated limited price downside ahead of U.S. Department of Agriculture reports Wednesday on quarterly stocks, supply and demand and final 1999 U.S. crop production.

An average of analysts' estimates placed 1999 U.S. soyabean production at 2.666 billion bushels, slightly below the USDA's forecast in November for 2.673 billion bushels. Up to late trading, ADM Investor Services bought 500 March contracts, O'Connor & Co. bought 500 March and Term Commodities sold 400 March, pit sources said.

In spreading, ABN AMRO Inc. bought 300 January contracts and sold 300 March at a price differential of 7-3/4 cents and TENCO Commercial Grain bought 900 March and sold 900 July at 15 cents.

Soyabean futures volume during Monday's pit session was estimated by the CBOT at 54,000 contracts, compared to 43,862 Friday.-Reuters