3/2/05 - Premiums of soybeans delivered to Asia are likely to fall in theweek ahead as key consumers here continue to shun expensive U.S. soybeans.

Recent gains in Chicago futures have spurred a selling spree among U.S.producers, traders said.

Soybean futures on the Chicago Board of Trade rallied Monday on continuedconcerns over a dry spell in Brazil and due to bullish technical charts.On Tuesday, the actively traded May soybeans futures contract ended 8 3/4cents lower at $6.13 1/4 a bushel.

However, major soybean consumers and importers in Asia - the Japanese andChinese crushers - aren't keen to buy expensive U.S. soybeans, traderssaid.

The price-conscious Chinese buyers are more interested in buying Braziliansoybeans, which are trading at a lower rate compared to U.S. soybeans.

Brazilian soybeans were quoted at 30 U.S. cents per bushel, over CBOT May,free-on-board to China in March. Freight rates were quoted around $64/tonfor a March shipment.

Also, Brazilian soybeans were quoted at only 12 cents/bu over CBOT May,FOB to China for a shipment in April.

One trader in Beijing said there are no quotes for U.S. soybeans asChinese buyers are just not interested.

Chinese crushers are awaiting two panamax-sized cargoes from the U.S. thatare scheduled to arrive sometime in March to April. Chinese crushers arekeen on buying Brazilian soybeans for April and May shipment.

In Japan, crushing margins for U.S. soybeans remain positive. Crushers areeyeing soybeans for April-May shipment.

But Tokyo-based traders said most crushers prefer canola seeds, not onlybecause it offers better crushing margins compared to soybeans but alsodue to rising local demand for canola oil. Health-conscious Japaneseconsumers prefer canola oil over soybean oil.

Wednesday, U.S. soybeans were quoted at 218 U.S. cents a bushel over theCBOT May contract for an April shipment to Japan, down from 225 cents/bulast week.

Meanwhile, ocean freight rates of dry-bulk cargoes are expected to remainhigh.

Wednesday, panamax-size cargoes were offered at $62-$63 a ton on thebenchmark route from the U.S. Gulf to Japan, slightly lower than lastweek's $63-64/ton, traders said.