CHICAGO (Dow Jones)–U.S. soybean futures are poised for a weaker start to
Tuesday’s day session, slipping on pressure from neighboring grain futures,
seasonal weakness and positioning ahead of government crop reports.
Overnight, Chicago Board of Trade soybean futures for November delivery were
2 1/2 cents lower at $10.32 1/2. Analysts expect soybeans to start 2 cents to 3
cents lower.
The absence of fresh supportive news is keeping attention on outside
markets, with sliding corn and wheat futures, a firmer U.S. dollar and weakness
in crude oil and gold futures attracting speculative selling, analysts said.
A higher U.S. dollar is bearish for commodities as most raw materials are
dollar-denominated, making it more expensive for foreign buyers to import.
However, losses are expected to lag behind declines in corn and wheat, as
soybeans are not as overbought as grain futures.
Traders are expected to even some positions ahead of Friday’s production
forecast from U.S. Department of Agriculture, with strong underlying demand a
supportive feature limiting losses as well.
Nevertheless, outlooks for record U.S. crop potential and no season-ending
frost threats seen in the near term will keep seasonal pressure in place, as
the market gears up for fresh inventories to enter the supply chain.
Soybeans may garner support from soyoil futures, as fresh export sales help
buoy the soy product, analysts said.
USDA on Tuesday announced private export sales of 40,000 tons of soyoil for
delivery to China, 29,500 tons of soyoil for delivery to unknown destinations
and 21,000 tons of soyoil for delivery to Peru in the 2010-11 marketing year.
The USDA is scheduled to release its weekly export inspections report at 11
a.m. EDT. The USDA will also release its crop progress report at 4 p.m. EDT,
with analysts anticipating crop ratings holding steady or declining as much as
2 percentage points.