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CBOT soyabeans close firm on short covering

CHICAGO: Soybean futures at the Chicago Board of Trade closed firm on Monday on a mild bout of short covering after dipping early in reaction to forecasts for beneficial rain in the US Midwest and improving conditions in South America, traders said.

Soyabeans closed 3/4 to 2 cents higher with March up 3/4 at $4.97-3/4. May was up 3/4 at $5.06-1/4.

"There wasn't a lot in here today. I think it was just a little short covering after last week," said Ron Kucha, floor spokesman for O'Connor and Co.

Soyabeans dropped sharply late last week following the better weather picture that has evolved for soyabeans in South America and in the US

"South American weather keeps getting better and the US weather is better too," a trader said.

Rain early on Monday in Rio Grande do Sul reduced stress and should slow yield losses in soyabeans there. Elsewhere, soil moisture conditions were favourable for the maturing crop, Weather Services Corp said.

Despite the bearish forecasts, steep losses in the futures last week attracted light short covering or bargain-type buying on Monday which restricted losses. On the export scene, traders said the market continued to be on alert for additional buying of soyabeans by China. China recently bought a large amount of US soyabeans and speculation continues that it may have bought more or is seeking additional supplies.

USDA's weekly export inspections report gave the market little direction. Soy inspected for export during the week ended on February 24 totalled 20.058 million bushels, about the same as the 19.339 million bushels inspected the previous week.

Position squaring was noted before on Tuesday, first notice day for deliveries on the CBOT on March contracts. Traders said from 200 to 500 lots of soy may be posted on Tuesday for delivery on the CBOT on March soybean contract.

Funds bought at least 2,000 contracts. Late in the day Term Commodities sold 100 on May and Iowa Grain and FIMAT each bought 100 on May. For the day, R.J. O'Brien bought 300 on March and 300 on May contracts, Refco bought 100 on March and 500 on May, and Carr Futures bought 500 on May.

Soybean futures volume was estimated by the CBOT at 70,000 lots, below the 85,883 lots traded on Friday.

Soybean options volume was estimated at 12,000 lots.-Reuters