U.S. soybean futures are poised for a lower start on Tuesday, as investors continue to reduce risk exposure in the market after government forecasters on Monday unexpectedly increased 2011 production outlooks from the August estimate.

"U.S. Department of Agriculture caught traders leaning on the bullish side of the boat yesterday," said Bryce Knorr, analyst with Farm Futures publication in morning market letter.

Industry analysts expect more liquidation from traders before prices stabilize.

CBOT soybeans are called to open down 6 cents to 8 cents.

In overnight trading, Chicago Board of Trade November soybean futures were down 6 cents at $13.90 a bushel.

The influence of external financial markets will continue to impact prices, with analysts concerned about soybean demand holding up in the face of a sluggish world economy. Weakness in world equity markets will keep buyers cautious, with traders worried that without strong demand it is tough to justify $14.00 soybean prices.

However, tight projected 2012 supplies and the threat of crop damaging frost will continue to underpin prices.

Traders are concerned about the potential for frost, which could limit output in states like Minnesota and North Dakota because forecasts call for temperatures to sink Thursday and Friday in the northern Midwest. Soybeans, in particular, are vulnerable because they were planted later in the spring than corn and will be harvested later this fall.

The USDA, in a weekly report, said 15% of the soybean crop was dropping leaves, lagging the average of 27%. The crops aren't completely safe from frost until they are mature, which is indicated by the dropping leaves.

It's not uncommon for farmers to lose bushels of corn and soybeans to frosts in northern states. Yet, the upcoming harvests are being watched closely because the crops have already suffered from hot, dry weather this summer.

Cold air will begin to surge into the Midwest on Tuesday, leading to widespread light frost in North Dakota, Minnesota, and northeastern Iowa over the following 3 mornings, according to weather forecast from Commodity Weather Group. "The coldest conditions are still set for Thursday morning in Minnesota, with isolated pockets of freeze damage possible with the probability of extensive damage in that area raised to 40%," CWG added in the forecast.