Beans drift lower awaiting report
Chicago Board of Trade soybeans for November delivery are down seven cents or 0.5% to $15.43 a bushel.
Traders are awaiting Thursday's forecasts from the U.S. Department of Agriculture, which will shed fresh light on how much this summer's severe drought affected the nation's soybean crop, nearly 60% of which has been harvested.
Analysts on average expect the USDA to raise its estimate for domestic soybean production this year by 5.2% from its September estimate, according to a poll by Dow Jones Newswires. In recent weeks, anecdotal reports and private forecasts indicate that soybean yields in the Midwest are not as poor as traders once feared.
Analysts estimate that the USDA will forecast domestic soybean production this year at 2.77 billion bushels, up from its forecast of 2.634 billion last month.
Many traders think the soybean market has been trading at prices that reflect soybean yields much higher than the USDA's September estimate, said Joe Vaclavik, president of brokerage and advisory firm Standard Grain Inc. in Chicago.
Traders think that is why the market is holding at levels more than $2 a bushel below early September highs for soybeans, Mr. Vaclavik said. Futures settled at an all-time record close of $17.71 on Sept. 4.
Analysts on Wednesday expect another choppy trading session, however, as some traders are unwilling to assume added risk ahead of Thursday's reports, which will include crop production forecasts, as well as domestic and global supply and demand estimates.
Soybean prices are likely to draw support from a long-term outlook that points to supplies falling to tight levels next spring, before growers in Brazil and Argentina complete their harvests. Brazil and Argentina, which rank second and third, respectively, behind the U.S. in soybean production, are both expected to produce record crops, according to USDA projections.
U.S. soybean export demand remains stout, particularly from China, with the U.S. essentially the only place for global importers to shop until South American crop harvests in the first half of next year.
The USDA announced Wednesday new export sales of 120,000 metric tons of soybeans to China for delivery during the 2012-2013 marketing year that ends next August.
Meanwhile, U.S. farmers have removed 58% of the soybean crop as of Sunday, according to the weekly crop-progress report from the USDA. The figures are higher than usual for this time of year, though progress last week trailed some analysts' expectations.
The soybean harvest advanced by 17 percentage points, as farmers enjoyed weather that was "extremely" conducive to harvest activity, said Sterling Smith, futures specialist with Citigroup Global Markets in Chicago.
Farmers were in a hurry to harvest soybeans, as the crop is more susceptible to field losses from cold, wet conditions than corn, Mr. Smith said.