CHICAGO (Dow Jones)--U.S. soybean futures are expected to start stronger Friday on crop concerns, but could stumble as market participants reduce risk.
Traders predict soybeans for July delivery, the most actively trade contract, will start 3 cents to 5 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract gained 5 1/2 cents, or 0.4%, to $14.12 1/2 a bushel.
Prices extended gains overnight after climbing to a nine-week high Thursday on concerns about poor weather reducing U.S. plantings. Yet selling could weigh on prices following poor reports on U.S. employment and weekly soybean export sales, traders said.
"Grains have been able to disconnect from outside influences this week, but be cautious with calls this morning as slowing growth in U.S. employment has money flow moving from risk to safe-haven assets," Benson Quinn Commodities told clients in a note.
Losses Friday would be a turnaround from Thursday's rally above the lofty price of $14 a bushel. Traders drove up prices as they are nervous about low soybean inventories that are expected to tighten further in the next marketing year, which begins in September.
Still, market participants may reduce risk ahead of the weekend following the rally. External markets came under pressure after the government's jobs report showed hiring by U.S. companies slowed dramatically in May.
Weekly U.S. soybean sales of 155,500 tons were unsupportive as traders were looking for sales of 125,000 tons to 400,000 tons. Sales of 82,500 tons for delivery in the current marketing year, which ends Aug. 31, were down 50% from the previous week and 19% from the prior four-week average, according to federal data.