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CBOT soyabean ends down as cash sinks, China rumors

CHICAGO: Chicago Board of Trade soyabean futures closed lower on Tuesday on sinking cash values and rumours that China may have cancelled some of the soyabeans it booked from the United States, traders said.

Soybeans closed 3 to 6-1/4 cents lower, with March down 6 at $5.02-1/4. May was down 5-3/4 at $5.11-1/2.

"The China rumour did surface again but no one knows whether that came after the break or before it, but they are shrewd marketers so anything can happen," a trader said.

China recently bought soyabeans from the United States and South America with amounts ranging up to 1 million tonnes. Industry sources have said the China contracts carry optional clauses which could allow them to back out of certain contracts.

The US cash CIF and FOB market weakened on Tuesday on increased farmer selling, active barge loadings and slack demand from exporters, cash merchandisers said.

Traders said outlooks for rainfall over the near term in the Midwest outweighed bullish implications from some hints and possible dry weather this summer in the US Midwest.

Chart watchers cited support in May soyabeans during on Tuesday's session at $5.12 and resistance at $5.20-1/2. May on Tuesday traded in a range from $5.11 to $5.20. Soybeans were supported early by talk that rainfall in northern Brazil may slow harvesting of the soyabean crop there.

"There has been good harvest weather in Argentina and some harvest delays in Brazil because of the rain, but I don't think that makes a lot of difference," said Bob Lekberg, analyst for Goldenberg Hehmeyer.

Rain likely will cause mild disruptions this week in the soyabean harvest in northern Brazil, a Weather Services Corp. meteorologist said on Tuesday.

"There will be some disruptions but there's no sign of flooding or excessive rains," said WSC's Mike Palmerino.

WSC said pod filling soyabeans have improved in Rio Grande do Sul as rainfall has increased. Crop production will be higher despite some earlier losses due to dryness.

Elsewhere, conditions were favourable for maturing beans though development was behind normal.

But in the US Midwest, frequent rains during the past several weeks significantly improved soil moisture and prospects for spring crop development, WSC said.

Very mild weather was expected in the Midwest with lingering showers during on Thursday. It will be cooler on Friday through Saturday with dry weather on Friday followed by a chance of rain favouring the southwest and south on Saturday, WSC said.

Rand Financial sold 400 May, Refco Inc. sold 500 May, FIMAT Futures sold 400 May and Cargill Investor Services bought 1,200 November while O'Connor and Co. bought 1,000 May, traders said.

Soybean futures volume was estimated by the CBOT at 47,000 lots, above the 46,647 lots traded on Monday.

Soybean options volume was estimated at 10,000 lots.-Reuters