CHICAGO (Dow Jones)--U.S. soybean futures are poised for a lower start Wednesday, influenced by weakness in neighboring grain futures and favorable planting conditions for the U.S. eastern Midwest this week.
CBOT soybeans are called to open 2 cents to 4 cents lower.
In overnight trading, Chicago Board of Trade July soybeans were down 0.04% at $13.75 1/2 a bushel, and new crop November futures were down 0.09% at $13.62 1/4.
Selling in wheat and corn will weigh on soybeans, with the potential for a lower amount of intended corn acres switching to soybeans amid an open planting window in the eastern corn-belt this week limiting buying, analysts said.
However, the uncertainty of final soybean acreage with traders unsure of the amount of corn acres that may be shifted to soybeans or the amount of acres that will be idled as farmers opt for preventive planting insurance promotes caution in the market.
The eastern Midwest and particularly Ohio that has a large amount of its crops left to plant have a favorable forecast for net drying to take place and thus fieldwork to get done, according to a forecast from Freese-Notis Weather, Inc. Temperatures will be warm and rainfall will be limited over the next ten days, Freese-Notis said.
For areas of the Midwest that have all of their spring fieldwork done, this is still a favorable forecast, as soil moisture levels are good, Freese-Notis said in the forecast. Friday and Monday-Wednesday of next week will be especially hot days with highs of 90 or higher likely common in the Midwest, Freese-Notis added in the forecast.
Soy plantings progressed well last week, with traders now focusing on weather conditions for a signal of how many acres will be planted to corn amid drier forecasts for the eastern corn-belt this week, said Dax Wedemeyer, analyst with West Des Moines, Iowa based brokerage U.S. Commodities.
Soybean planting was 51% complete as of Sunday, up from 41% a week ago but behind the average of 71% for that time of year, according to U.S. Department of Agriculture. Traders had expected planting to fall in a range of 50% to 59% complete. The crop was 27% emerged, behind the average of 39% for that time of year.
Progress in soybean planting mirrored the advances in corn, with western areas of the Midwest accelerating, while eastern areas lagged well behind. Planting was 87% complete in Iowa, in line with the average of 88%, while progress in Indiana and Ohio were only 25% and 7% complete, respectively.
Despite the early weakness, two-sided trade is expected to emerge, with precariously tight projected end of year supply forecasts continuing to underpin prices, according to a market note from AgResource Co.
The tightness of supplies for the marketing year that ends August 2012 leaves little room for error in 2011 production, and that raises the risk of any lost acres and smaller yields further cutting into the balance between supply and demand.
However, prices are expected to continue to hold within recent trading ranges as slow export and domestic demand continue to limit upside movement in prices.