U.S. soybean futures are poised for a weaker start Friday, driven lower by traders booking profits on recent strong gains.
CBOT soybeans are called to open 3 cents to 5 cents lower.
In overnight trading, Chicago Board of Trade July soybeans were down 0.3% at $13.75, and new crop November futures were down 0.2% at $13.47.
The combination of profit-taking, slow demand and the threat of some acres that farmers are not able to sow to grain shifting to soybeans, will weigh on prices in early trade, according to Doane Advisory Service market note.
Wet weather continues to pose a risk to corn seedings in the eastern Midwest and northern plains, a feat that could lead to more soy plantings.
The Telvent DTN weather forecast said another prolonged period of wet weather is in store for the Midwest during the next 7 days with the most persistent rain over southern and eastern areas. Major delays in planting continue in Indiana and Ohio while wet weather will delay soybean planting in the western Midwest as well. Some river flooding could also return during the next 7 days due to the persistent rainfall, Telvent added.
Despite sentiment that corn planting delays in the U.S. will ultimately result in more soybean acres, the market continues to hold within a recent trading range, as bullish outlooks amid tight projected supply forecasts through 2012 underpin prices.
The tight supply scenario places increased pressure on U.S. farmers to produce bumper crops in 2011. Traders are also expected to look beyond the soybean market to the outside markets for guidance. Steady crude oil and precious metal futures are not providing any definitive direction to traders.
Yet, soybeans still have the potential to slide lower during the trading session, as slower export and domestic demand continue to limit upside movement in prices. Record harvests in South America have cooled demand for U.S. exports. Freshly harvested South American supplies have increased competition for global soybeans and soy product exports, with cheaper Brazilian supplies an attractive alternative to U.S. supplies.
China, the leading importer of U.S. and global soybeans, has slowed its purchasing of late, as China's soybean demand is reportedly sluggish with port inventories high and supplies at crushing plants at comfortable levels.