U.S. soybean futures are poised for a higher start Monday, following the price strength anticipated in neighboring grain futures.
In overnight trading, Chicago Board of Trade May soybean futures, the most active contract, was up 3 3/4 cents at $13.97 1/2. New crop November futures were up 4 cents at $13.93 1/4.
CBOT soybeans are seen opening 2 cents to 4 cents higher.
Spillover support from corn will support soybean futures, as the bean market must keep prices attractive in an effort to not lose too much new crop seeded acres to corn. The market must maintain adequate acreage as attempts to replenish depleted supplies from last year's harvest, analysts said.
The market has a task of rationing usage of already precariously tight projected end of year supplies as well, a feature rekindled after U.S. Department of Agriculture projected 2nd quarter stocks at 1.25 billion bushels last week, below the low end of industry expectations.
Soybean futures are also expected to keep prices attractive enough to encourage South American plantings next crop year. However, plantings for next year's South American crop are a long way off, and this will keep a very cautious view on U.S. weather conditions this year.
However, advances are seen limited by harvest progress in South America, which is seen limiting global demand for U.S. soybeans. Despite recent heavy rains in parts of Brazil slowing harvest, large crops are still expected to provide competition for U.S. soy exports.
Lackluster Chinese demand in the world soybean market amid negative Chinese soy crush margins and waning interest in vegoil imports are limiting demand from the world's leading importer of soybeans.
Ongoing talk in the market that China is rolling South American soy purchases as well as switching a few U.S. soybean purchases to Brazil is seen limiting upside potential, according to an AgResource Co. market note.
Meanwhile, weather will also play a key role in price direction as a prolonged wet, cold start to spring could shift some corn acres to soybeans, particularly since corn planted on the same land in successive years produced lower-than-expected yields in 2010.
On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT.