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CBOT soya ends lower after unexpected Brazil rains

CHICAGO: Soyabean futures at the Chicago Board of Trade finished lower on Wednesday, pressed by technical correction from recent sharp gains and unexpected rains in South America's soyabean belt.

Soyabeans settled 2 to 4-1/2 cents per bushel lower, with the most-active March contract down 3-3/4 at $5.13-1/4.

Light rains fell in parts of Brazil's southern soyabean belt over the past 24 hours, including the state of Rio Grande do Sul, where soyabean acreage has suffered from dry conditions.

Brazil forecasters Somar Meteorologia said Rio Grande do Sul received 26 millimetres (mm) of rain in the central Cruz Alta area during Tuesday, while 13 mm was reported in other key soya areas.

The rains helped temper growing bullishness in the soyabean market, traders said, and beliefs that the market was overbought technically and due for correction also contributed to selling interest.

"I think that spooked a few people," said Charlie Sernatinger, vice president for Chicago grain sales at E.D. & F. Man International. "With the unexpected rains overnight, we took a little edge off the market."

Commercial buying activity helped limit declines, traders said. Commercial interests bought about 2,000 soyabean contracts on the day, according to floor sources.

Persistent dryness in southern Brazil and Argentina remained a concern. Much of South America's soyabean crop was nearing its critical reproductive period, which typically occurs in late January and February. Moisture needs are greatest during this period.

Salomon Smith Barney Inc. meteorologists said a high pressure ridge was expected to intensify across southern Brazil and Argentina over the weekend and early next week, resulting in mostly dry conditions and warmer temperatures.

Temperatures ranging from 95 to 100 degrees Fahrenheit were projected Sunday through Tuesday across Brazil's southern soyabean belt.

"There continues to be no indication of any widespread significant rains in the southern corn and bean belt during the next week to 10 days," Salomon Smith Barney said in a report. "If this pattern persists into the early or middle portion of February in southern Brazil, then the result will be steadily mounting and irreversible yield declines."

Up to late trading, Rand Financial Services sold 200 March contracts, R.J. O'Brien & Associates and FIMAT Futures Inc. each bought 300 March and Cargill Inc. bought 600 May, pit sources said.

Soyabean futures volume during Wednesday's pit session was estimated by the CBOT at 46,000 contracts.-Reuters