CBOT soy outlook: Seen lower; harvest weakness, economic fear
U.S. soybean futures are expected to start lower, fueled by expanding harvest pressure and ongoing worries about Europe's lingering debt crisis.
Chicago Board of Trade soybeans are called to open down 8 cents to 10 cents.
In overnight trading, CBOT November soybean futures were down 9 cents or 0.7% at $12.54 a bushel.
Traders continue to brace for an influx of freshly harvested U.S. soybeans entering the supply chain in the next month. Weather forecasts projecting drier Midwest weather next week, ideal for accelerating harvest, are expected to limit any aggressive buying interest.
Drier and gradually warming conditions will prevail across the central U.S. until the next rain event pushes into the western Midwest and eastern Plains late next week, according to a morning forecast from Global Weather Group. "The drying next week will help to ease wetness concerns in most of the spots being favored by current rains, with drying across the deep U.S. South allowing corn, cotton, and soybean harvest to improve over the next 2 weeks," forecasters at GWG wrote in the forecast.
Industry analysts anticipate traders will remain hesitant to aggressively add risk, as they anxiously await actual yield results from the autumn harvest.
Global recession concerns remain a hindrance to a sustainable price bounce after prices slumped to 10-month lows Monday. The ongoing threat of a global economic slow-down raises the threat of diminished export demand for U.S. soybeans, a feature that limits support for prices.
Slow exports are again weighing on trader sentiment, with Chinese traders ready to take next week off for a national holiday, said Bryce Knorr, analyst with Farm Futures, an agricultural publication in a market note. "While China is still booking U.S. cargoes for deferred delivery, shipments could be slow until December," Knorr added in the note.
China is the world's leading importer of global soybeans.
Meanwhile, soybean futures should draw support from traders covering some recently sold positions ahead of Friday's report on stocks in all positions as of Sept. 1 from U.S. Department of Agriculture.
Traders are also optimistic that the recent break in prices will drum up fresh export demand.