U.S. soybeans extend slide ahead of key USDA data

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U.S. soybean futures tumbled on expectations the U.S. Department of Agriculture will raise its estimates for domestic and global inventories in hotly anticipated crop reports on Friday, traders said. Grain futures also slipped.

The USDA at 11 a.m. CST (1700 GMT) is projected to raise its outlook for U.S. soy inventories at the end of the crop's marketing year on Aug. 31 by 2.3 percent from last month to 133 million bushels, according to a Reuters poll.

Global soybean supplies are seen up 0.4 percent from last month at 60.17 million tonnes.

"A reduction to the soybean stocks/use ratio could turn things higher, but the market is expecting the reports to be more unfavorable for soybeans," said Kayla Burkhart, broker for SunPrairie Grain.

Chicago Board of Trade March soybeans slid 1.2 percent to $13.62-3/4 a bushel by 9:40 a.m. CST. The market was down about 0.3 percent for the week.

March corn was down 0.9 percent at $6.92-3/4, but up almost 2 percent for the week. March wheat dipped 0.8 percent to $7.38-3/4 and was down almost 1 percent for the week.

Soybeans have dropped for four days in a row amid expectations that Brazil, which competes with the United States for export business, will produce a record crop this year.

Competition for business is likely to intensify for soybean suppliers in February when the Brazilian crop hits the market.

The USDA on Friday said private exporters had struck deals to sell 120,000 tonnes of U.S. soybeans to top importer China.

On Thursday, exporters reported 306,000 tonnes of U.S. and optional-origin soybeans to China for delivery this marketing year and next. On Wednesday, they reported 120,000 tonnes of optional-origin soybeans to China for 2013/14 delivery. Soy sales to China are "doing little in the way of helping out the futures market", Burkhart said.

SOY PLANTINGS ADVANCE

Soy planting in Argentina, which also competes for export business, advanced quickly in the past week to cover more than 90 percent of the targeted area, easing fears of a crop shortfall that could keep world food prices high, a key grains exchange said on Thursday.

An unusually wet start to the 2012/13 crop year delayed sowing in Argentina, the world's No. 3 soybean exporter and top supplier of soyoil and soymeal.

Heavy rains are forecast for Brazil's center-west and southeast regions over the next five days, helping what should be a record soybean harvest and giving some relief to hydroelectric dam reservoirs, local meteorologist Somar said on Thursday.

Top soy-growing state Mato Grosso received below-average rainfall in October and December, though rains were ample in November and should be strong in January, Somar meteorologist Marco Antonio dos Santos told Reuters.

WHEAT THREAT

Weather is less favorable in the United States for wheat. A cold snap expected early next week in the U.S. Plains' hard red winter wheat region may harm some of the crop that is already struggling amid the worst drought in more than 50 years, said Andy Karst, meteorologist for World Weather Inc.

The U.S. Plains remained tightly gripped by a severe drought, according to a report issued on Thursday, and fears mounted that another hot and dry year could lie ahead for key crop-growing and cattle-grazing regions.

Still, the USDA on Friday is expected to estimate U.S. winter wheat seedings at 42.687 million acres (17.275 million hectares), up 3.3 percent from last year.


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