U.S. soybean futures are poised to decline Friday, fueled by seasonal harvest weakness, with a modest reduction in inventory forecasts not enough to offset spillover pressure from an expected drop in corn prices.

Chicago Board of Trade soybean futures are called to open down 5 cents to 10 cents.

Overall forecasts from government forecasters was supportive, but it will be hard to rally prices in front of an active harvest week ahead, traders at CBOT said following the release of U.S. Department of Agriculture stocks reports.

Quarterly soybean stocks at the end of the fourth quarter of the 2010-11 marketing year were estimated at 215 million bushels as of Sept. 1, the USDA reported, down 4% from the average analyst estimate and the government's carry out forecast in the September supply and demand report of 225 million bushels.

The stocks data was neutral, as it did not adversely alter supply forecasts, said Don Roose, president Iowa based brokerage U.S. Commodities. "The big question is at what price do end-users and importers see value, that will spur demand," Roose added.

Meanwhile, soybean production for 2010 was revised slightly lower to 3.329 billion bushels, down 160,000 bushels.

The industry continues to brace for an influx of freshly harvested U.S. soybeans to enter the supply chain in the next month. Weather forecasts projecting drier Midwest weather next week, ideal for accelerating harvest are expected to limit any near-term aggressive buying interest.

Traders remain cautious of risk, with global recession concerns remaining a hindrance to sustainable price advances. Yet, industry analysts say the market is fundamentally undervalued and oversold, but with global economic concerns looming large, traders remain hesitant to aggressively add risk.

Traders are also cautious of 2011 soybean production, as there are valid question on acres and yield that will need to be answered from the fall harvest, says Rich Nelson, director of research at Allendale Inc. in McHenry, Ill.

Nevertheless, traders expect corn to drag down soybean futures, but traders do wonder how much farther beans can fall after recent declines dropped prices 16% to 10-month lows.