U.S. soy futures are poised to open higher Wednesday on a weak U.S. dollar and spillover support from worries about corn and wheat crops.
Traders expect Chicago Board of Trade soybeans to open 14 to 16 cents higher. In overnight trade, soybeans for May delivery were up 14 1/4 cents, or 1.1%, to $13.56 1/4 a bushel.
Soybean oil for May delivery was up .65 cent to 58.18 cents per pound and May soybean meal was up $2.90 to $349.30 per short ton.
The soybean market is being supported by gains in the other two dominant U.S. crops, corn and wheat. The winter wheat crop in the southern Plains is being hurt by a drought, while corn growers are growing increasingly antsy about weather in the Midwest, which is cold and wet and expected to get in the way of planting for the rest of the month.
With supplies of U.S. grains, particularly corn, extremely tight, a strong crop this year is essential. MF Global broker Joseph Vaclavik said in a morning note that planting issues are "quickly becoming an issue."
"In general, grain markets will not show significant strength on planting delays alone, however this year's ultra-sensitive balance sheets may be an exception," he said.
Gains in corn are generally supportive to soybeans, but Jason Britt, president of Central States Commodities, said that delayed corn planting could ultimately lead to more soybean acres, which would be negative for the market.
Wednesday's market will be supported by the dollar, which is "not just a little weak, but very weak," Britt said. The weak dollar is seen as making U.S. commodities more attractive for export, and shifts investor money flows into commodities.
Worries about poor soybean crushing margins in China, which could cut into that nation's demand, will continue to serve as an overhang to the market limiting gains, Britt said. Analysts also note that a large South American harvest will provide increased competition for U.S. soybeans this year, pressuring the market.