Soyabean futures at the Chicago Board of Trade set back early Wednesday after this week's fund-led rally, traders said. Some commercial hedge selling also pressured the market early. But prices popped higher at one point amid a round of local short covering, as there was little momentum to the early break in prices, traders said. May soyabeans were 3-1/2 cents lower at $6.77-1/2 per bushel by 10:45 am CST (1645 GMT), but had climbed 4 cents to $6.85 at one point. The deferred months were 2 to 6 cents weaker.
Refco and Cargill Investor Services each sold 400 to 500 May early, but then Refco turned around and bought back about 400 to 500 May, traders said. Commercial hedge pressure also weighed on the market early with Bunge selling at least 100 May.
The spot price for soyabeans rose to a seven-month high on Tuesday as funds returned to buy more commodities after Asian markets rallied overnight. Continued fears about inflation have kept the market edgy and limited the amount of selling on Wednesday.
Soyabeans hovered near multi-month highs despite a bearish fundamental outlook, including the US government's forecast for record world oilseed production this year despite a cut in the Brazilian soyabean crop estimate due to drought.
Traders continue to monitor weather in Southern Brazil, which was forecast to be dry during the next five days. That was expected to increase drought damage, private weather forecaster said. AgRural consultants on Monday slashed its Brazil 2004/05 soyabean crop estimate by 13 percent to 52.3 million tonnes, from 60 million tonnes in February, due to drought.
Export business featured talk this week that there was fresh Chinese interest in US soyabeans out of the Pacific Northwest.
There were no soyabeans delivered against the March contract on Wednesday, the last day for bean deliveries.
Soya registrations with the CBOT late Tuesday were unchanged at 744 lots. The soyameal market was weaker on a downward correction after the front four months closed above $200 per ton on Tuesday. May meal was down $1.30 at $200.90, while the deferreds were 20 cents to $1.70 lower. US cash soyameal markets were also weaker, casting a softer tone to futures.
There was no soyameal posted for delivery Wednesday against the expired March contract. Meal registrations with the CBOT late Tuesday dropped to 176 lots from the previous 518 lots.
The CBOT soyaoil market was choppy, looking for direction after the rally on Tuesday. May oil was down 0.06 at 24.17 cents per lb, with the back months down 0.37 to up 0.10 cent.
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