Soyabean futures at the Chicago Board of Trade fell early Wednesday on a technical setback from this week's fund-led short-covering rally, traders said. The May contract fell below its 50-day moving average of $5.31-1/2, sliding to a low of $5.30. The market was viewed as technically overbought going into the session, having risen more than 35 cents in a little more than a week. The nine-day relative strength index for the May contract closed at 73 on Tuesday.

An RSI of 70 or higher is one indicator of an overbought market, traders said.

The market was 1 to 4-1/4 cents lower, with May beans down 4-1/4 cents at $5.31-1/4 per bushel by 10:30 am (1630 GMT). March soya was 3-3/4 cents lower at $5.31-1/2.

Local traders were the featured sellers early. ADM Investor Services bought 1,000 May shortly after the open, which helped underpin the market early, floor traders said.

Concerns about a cut in soyabean yields in southern Brazil, which has been dry, helped spark the recent climb in futures prices. The driest region remains the No 3 soya state of Rio Grande do Sul. That region was expected to stay hot and dry through early next week.

Soyameal futures were lower, setting back from their recent climb as funds covered short positions. March meal was down $1 at $162.10 per ton, with the deferreds down 50 cents to $1.50.

The US soyameal cash market was steady to weaker.

The soyaoil market was weaker on lingering concerns about large US soyaoil stocks after the National Oilseed Processors Association reported on Tuesday a 25 percent jump in stocks during January.

The drop in soyabeans also weighed on prices. March soyaoil was down 0.06 cent at 19.56 cent per lb., while the back months were 0.05 to 0.12 cent lower.

Copyright Reuters, 2005