20000108CBOT soyabeans erase gains, end mostly lower

CHICAGO: Soyabean futures at the Chicago Board of Trade ended mostly lower Thursday as a late, technically inspired sell-off erased early gains fuelled by weather conditions in South America, traders said.

Soyabeans settled 1/2 cent per bushel higher to 1-1/2 lower, with March down 1-1/2 at $4.75-1/2 after earlier rising as high as $4.80-1/2 for the contract's highest price since $4.82-1/4 on December 27.

Uncertainty over weather patterns in South America's soyabean belt helped propel prices higher for most of the session. Crops in key areas of the belt, including southern Brazil and much of Argentina, were under stress from dryness and needed more rain, meteorologists said.

But the March soyabean contract's inability to hold above $4.80, considered a key chart level, prompted selling by local traders shortly before the close, floor sources said.

"Locals were caught long and they got out," one CBOT broker said. "They tried to break it further above $4.80, and when that didn't happen, it came off quickly."

Talk that this week's price gains had stirred a pickup in US farmer selling Thursday also contributed to late weakness, traders said.

Weather remained a concern for South America, home of the world's second- and third-leading soyabean growers, Brazil and Argentina.

Weather Services Corp. said mostly dry conditions or just a few light showers were ahead in the southern Brazil state of Rio Grande do Sul and southwest Parana during the next five days. Temperatures were expected to be above normal with highs in the 90s (degrees Fahrenheit).

"I thought the South American weather forecast was generally still supportive for beans," said Dan Cekander, head of grain research for FIMAT Futures Inc. in Chicago. "We don't have much rain for the dry areas of southern Brazil and Argentina."

Commodity funds were estimated to have bought about 500 soyabean contracts up to late trading, traders said. Funds have been accumulating long positions this week, traders said.

Weekly export sales data from the US Department of Agriculture, usually released Thursday, was delayed to Friday. Commodity funds were light buyers on the day, and were estimated to have bought about 500 contracts up to late trading.

FIMAT Futures Inc. bought 400 March contracts, Cargill Investor Services and TENCO Commercial Grain each bought 300 March and R.J. O'Brien & Associates sold 700 March, floor sources said.

Soyabean futures volume during Thursday's pit session was estimated by the CBOT at 43,000 contracts, compared to 53,332 Wednesday.

CBOT wheat ends lower amid lack of export business

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade ended mostly lower on Thursday as early strength waned amid the absence of fresh export business and a lack of fundamental leads, traders said.

CBOT wheat settled 1 cent per bushel higher to 1-1/4 cents per bushel lower, with March off 1-1/4 at $2.48-1/2.

"The market started firm but lost steam because there was just nothing going on," said a CBOT trader. "Even the strength in corn could not help wheat."

Also weighing on the market was a weaker tone in US cash markets. Grain merchandisers cut basis bids as much as 5 cents a bushel in some US Plains locations as spot demand eased.

The trader said early support from concern over the weather in the US Plains winter wheat region amid forecasts for warmer and drier conditions waned through the session.

Some of the early strength in wheat was also attributed to gains in soyabeans amid concerns over dry weather conditions in Brazil and Argentina, the world's second- and third-largest producers after the United States.

Traders said they would continue to watch weather developments in the Plains as temperatures were forecast to rise to the 50s and 60s degrees Fahrenheit next week.

The high temperatures could open the door to the possibility of the crop breaking from its winter dormancy, leaving it vulnerable to a cold snap.

The latest 6- to 10-day forecast from the National Weather Service projected above-normal to much above-normal temperatures and no precipitation for Kansas, Oklahoma and north Texas for Jan. 11 to 15.

Meteorologists downplayed the dormancy concerns but said that the ongoing dryness in the Plains could cause problems for wheat acreage in spring.

Below-normal rainfall during and after the planting season last fall led to difficulties in germination and establishment of the crop in many areas.

Traders were also waiting for government reports next Wednesday on US crop production, winter wheat acreage and quarterly stocks.

Weekly export sales data from the US Department of Agriculture, usually released Thursday, was delayed to Friday because of the New Year's holiday.

Commodity funds bought 600 contracts. Carr Futures sold 500 March, Refco Inc. sold 300 March, Merrill Lynch, ING Futures and Rand Financial each sold 100 March, Salomon Smith Barney bought 300 March, Prudential Securities bought 400 March, 200 July.

CBOT wheat futures volume was estimated by the CBOT at 19,000 lots, compared with 21,250 traded on Wednesday.

Wheat options volume was estimated at 4,200.

CBOT corn ends higher on fund buying, Brazil talk

CHICAGO: Corn futures at the Chicago Board of Trade ended higher on Thursday on commodity fund buying and amid talk Brazil was seeking more US corn, traders said.

CBOT corn futures settled 1/2 to 1-1/2 cents per bushel higher, with March up 3/4 at $2.03-3/4.

Funds bought 4,500 contracts. Increased farmer selling in the US cash markets, which touched off hedge selling in futures, and late declines in soyabeans trimmed gains.

March corn tested the psychologically important 50-day moving average level of $2.05-3/4 but could not close above it. "It will be a big deal if March can close above it," said analyst Charlie Sernatinger of E.D. & F. Man International.

Brazil was also thought to be looking for up to 250,000 tonnes of US corn. US exporters said Brazil, which traditionally buys corn from Argentina, was believed to have bought up to 85,000 tonnes of US corn either on Wednesday or Thursday.

"It seems to me that the purchases are demand-driven and not because of the drought conditions in Brazil and Argentina hurting their crop," a CBOT trader said.

Weather Services Corp. on Thursday said drought conditions in October and November in some major northern growing areas of Brazil will impact production. It said crop stress and production losses have now shifted to southern growing areas.

WSC said periods of hot, dry weather are impacting corn pollination in Argentina.

Argentine Agriculture Secretary Antonio Berhongaray said on Thursday there has been a 15 percent increase in the country's 1999/2000 corn seedings area to 3.77 million hectares from 3.27 million during the previous season. He declined to give production estimates.

There were few other fundamental leads in corn. The weekly export sales data from the US Department of Agriculture, usually released Thursday, was delayed to Friday.

ADM Investor Services sold 2,000 March, bought 400 July contracts, FIMAT Futures sold 1,400 March, O'Connor & Co bought 1,000 March, Refco Inc. bought 1,700 March, 300 May, E.D. & F. Man International bought 500 March.

Corn futures volume was estimated by the CBOT at 40,000 lots, compared to the 41,592 traded Wednesday.

Corn options volume was estimated at 8,500 lots.

CBOT soyameal fades, ends lower, soyaoil up on China

CHICAGO: Soyameal futures faded sharply in late trading Thursday to finish mostly lower, reversing two-month highs set earlier on South America growing conditions and commodity fund buying, traders said.

Soyaoil futures also eased late but still ended mostly higher, closing at the highest levels in more than a week on talk of Chinese buying activity in US and South American soyaoil.

Soyameal settled 10 cents to $1.70 per ton lower, with March down $1.40 at $150.40, after earlier rising as high as $152.70 for the contract's highest price since $153.00 on Nov. 8.

Soyaoil settled 0.02 cent per lb lower to 0.11 higher, with March up 0.09 at 16.05 cents, the contract's highest close since 16.07 on December 28.

Both CBOT soyabeans and soyameal broke shortly before the close in what traders said was primarily a technical slide triggered by the market's inability to push significantly beyond key chart areas. Traders said the soyabean market's advances this week appeared to spur farmer cash sales, resulting in hedging pressure on futures.

Continued dryness in key crop areas of Brazil and Argentina, the world's second- and third-leading soyabean producing nations behind the United States, remained in trade focus.

Dryness concerns revolved around southern Brazil and much of Argentina, and those areas had very limited chances for rain through at least the end of the week, meteorologists said.

Soyaoil climbed in response to talk that China had bought or intended to buy soyaoil from the US and South America.

Traders in Asia said they received inquiries from a Beijing company to buy 20,000 tonnes of US soyaoil, which was currently quoted at $400 a tonne C&F. Chinese vegetable oil buyers recently received fresh government quotas to import about 500,000 tonnes of edible oils.

"The China talk has supported oil," said Dan Cekander, head of grain research for FIMAT Futures Inc., who said market chatter had China buying up to 40,000 tonnes of US soyaoil.

Cekander said making foreign sales now was crucial for the US soyaoil market, as fresh and abundant South American supplies will be available in about two months once harvest of this year's soyabean crop begins.

"The window is narrowing - we need to do business before the South American crop," Cekander said. "If we don't do it for February shipment or early March, we're not competitive (on price)."

Commercial interests bought about 2,000 soyaoil contracts up to the last 45 minutes of trading, traders estimated. In meal, funds bought at least 3,500 meal contracts on the day.

Salomon Smith Barney Inc. bought 600 March meal contracts and 200 May, Refco Inc. bought 500 March, Cargill Investor Services bought 400 March, O'Connor & Co. bought 300 March and 300 May and Goldenberg, Hehmeyer & Co. sold 500 March, floor sources said.

In soyaoil, Cargill Inc. bought 400 March and 300 May, Term Commodities and Produce Grain each bought 400 March and Carr Futures sold 500 March and 300 May.

Soyameal futures volume during Thursday's pit session was estimated by the CBOT at 24,000 contracts, compared to 26,373 Wednesday. Soyaoil volume was estimated at 25,000 contracts, compared to 22,392 Wednesday.-Reuters