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CBOT soyabeans end mixed amid consolidation

CHICAGO: Soyabean futures at the Chicago Board of Trade ended mixed Friday, as the market consolidated after a week of sharp advances, traders said.

Also, weather updates slightly eased trade concerns over dryness in South America's soyabean belt.

Soyabeans settled 4 cents per bushel higher to 1/2 lower, with March down 1/4 cent at $5.05-1/4, after earlier rising as high as $5.07-1/2 for the contract's highest price since $5.17 on Oct. 20. Traders remained fearful of potential, sizable production losses for South America's soyabean crop due to persistent dryness in some areas.

But forecasts Friday indicated cooler temperatures and improved chances for rain next week in some of the driest parts, including southern Brazil, as a ridge of high pressure over the region weakens and shifts. Crops in southern Brazil and Argentina have suffered from below-normal rainfall since planting began in October.

Salomon Smith Barney Inc. meteorologists projected three-tenths to 1-1/2 inch of rain for 50 percent to 55 percent of Brazil's southern soyabean belt Wednesday and Thursday.

"The high pressure seems like it's going to be pushing off, allowing cooler temperatures to come in," said Mark Weidner, grain and oilseed analyst for Cargill Investor Services in Chicago. "But we're still uncertain over the coverage and amounts we're going to get."

Any rain next week may arrive too late to prevent reduced yield potential for South America's crops, analysts said.

Earlier Friday, Brazil-based crop analysts Safras e Mercado said the firm downwardly revised its estimate for Brazil's 1999/2000 soyabean production to 30.05 million tonnes from its previous forecast of 31.27 million tonnes.

Safras sharply reduced the production estimates for two major southern states, Parana and Rio Grande do Sul, where farmers have reported serious damage from months of winter drought. Some replanting has been necessary in both states.

The US Department of Agriculture projected 1999/2000 soyabean output for Brazil -- the world's second-leading soyabean grower -- at 31 million tonnes, equal with 1998/99. Some traders and analysts look for a decline in the USDA number as well.

"A lot of the commercial guys I talk to are trading a Brazil crop at 29 to 29.5 (million tonnes)," said Brian Scott, a trader with R.J. O'Brien & Associates at the CBOT.

Technically, the soyabean market held a significantly more bullish stance after the gains over the past two weeks, but may be overbought and due for some correction, traders said. Despite Friday's setback, March soyabeans rose 9 cents on the week, and have gained 30-3/4 cents, or 6.5 percent, since the release of bullishly-viewed USDA reports Jan. 12.

In export news, the US Department of Agriculture's weekly export sales report listed net US soyabean sales during the week ended Jan. 13 at 591,000 tonnes, up 14 percent from the four-week average but within the range of estimates for 350,000 to 700,000 tonnes.

Commodity funds were prominent buyers during that span and continued to buy Friday, activity that traders said appeared to be the accumulation of long positions.

Traders estimated that funds bought at least 1,000 soyabean contracts on the day.

Up to late trading, O'Connor & Co. bought 500 March contracts, Goldenberg, Hehmeyer & Co. bought 400 March, Prudential Securities bought 300 March, Refco Inc. sold 500 March and Rosenthal Collins sold 400 March, pit sources said.

In options, TENCO Commercial Grain bought 500 March $5.25 calls and sold 600 May $6.00 calls.

In spreading, Produce Grain bought 400 March and sold 400 July at a price difference of 17 cents.

Soyabean futures volume during Friday's pit session was estimated by the CBOT at 45,000 contracts, compared to 50,019 Thursday.-Reuters