HAMBURG (April 16 2003) : US soyabean futures prices could be vulnerableto short term falls despite the new contract highs reached last week,Hamburg-based newsletter Oil World said.

"Near-term, the US soyabeans market may be vulnerable to a price setbackas open interest is record high and profit taking could become moreimportant than new speculative buying," the newsletter said.

It added: "The obvious question now is: Can we expect further priceadvances in the weeks and months ahead or will the glut of South Americansoyabean production from 2003 crops put an end to the US soyabean futuresprice rally?"

Oil World stressed it still believes global edible oil prices will remainfirm in the medium-term.

Reasons are the slowdown in the rate of increase in palm oil production,lower supplies of other seed oils competing with soyaoil and a reductionin US soyaoil stocks.

But it warns oilmeal prices may fall because of the large volumes of SouthAmerican soyabeans to be crushed this season to compensate for lowersupplies of other oilseeds.

Soya has a higher meal content than most other oilseeds.

"We would not be surprised if the expected record South American soyabeancrush during the months to come leads to temporary (meal) surplusesdifficult to absorb at current prices in view of the rather uncertainlivestock market in Europe," it said.-Reuters