CBOT soy outlook: Set to rebound after six-day slide
U.S. soybean futures prices are expected to rebound from a six-day slide Tuesday, fueled by a recovery in external financial markets and ongoing concerns about crop potential.
The influence of external financial markets continue to impact prices, with money managers less averse to risk after world equity markets stabilized and the U.S. dollar stumbled overnight, analysts said.
CBOT soybeans are called to open up 10 cents to 13 cents.
In overnight trading, Chicago Board of Trade November soybean futures were up 13 cents at $13.49 a bushel.
The uncertainty of 2011 U.S. soybean crop potential remains a supportive feature, with traders concerned that crops remain vulnerable to frost threats amid lagging crop development.
U.S. Department of Agriculture, in a weekly report on Monday, said 33% of the U.S. soybean crop was dropping leaves, lagging the average of 47%. When soybean plants drop leaves it signals the plant has matured.
Traders remain concerned about the potential for frost, which could limit output in northern states like Minnesota, Iowa and North Dakota. Soybeans, in particular, are vulnerable because they were planted later in the spring than corn and will be harvested later this fall.
Some 41% of soybeans in Minnesota were dropping leaves as of Sunday, below the five-year average of 59% for this time of year, according to the USDA. The percentage of soybean crops rated in good to excellent conditions in Minnesota dropped by 10 percentage points from last week to 51%, according to USDA.
Frost damage last week was concentrated in Minnesota, where crops were planted later than normal due to spring rains. "Agronomists there estimate bean yields could be reduced by three to seven bushels per acre, with crop quality potentially a bigger concern than a yield reduction, said Karl Setzer, analyst with MaxYield Cooperative in West Bend, Iowa in a market note.
Further support is expected from grain buyers surfacing after recent price breaks.
Private exporters reported to USDA export sales of 120,000 metric tons of soybeans for delivery to China during the 2011/2012 marketing year.
Analysts had been concerned about soybean demand holding up in the face of a sluggish world economy.
However, money managers remain cautious of risk exposure in the face of a tenuous global economy, with seasonal pressure from buyers awaiting the fall harvest for better buying opportunities limiting advances, analysts added.