CBOT SOY OUTLOOK: Starts Down On Improved Argentina Weather

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CHICAGO (Dow Jones)--U.S. soybean futures are expected to start lower Friday due to rains having improved the condition of crops in Argentina, the world's third-largest exporter of the oilseed, analysts said.

Traders and analysts predict soybeans for March delivery, the most-active contract, will start 2 to 3 cents a bushel weaker at the Chicago Board of Trade. In overnight electronic trading, the contract slipped 3 1/2 cents, or 0.2%, to $14.10 3/4 a bushel.

Wetter weather in Argentina should weigh on futures prices as it raises expectations for a better harvest, analysts said. Argentina's overall weather pattern "is improving, with systems producing rain every five days," according to AgResource Co., a Chicago-based agricultural consultancy.

Soybean futures prices recently reached their highest level in more than two years due to concerns that a poor Argentine crop would shift demand to the U.S., the world's top soybean exporter. Demand for U.S. soybeans has already been strong due to record buying by China, the world's top soybean importer.

"Conditions have likely improved from the early season dry and hot weather" in Argentina, said Joel Burgio, senior agricultural meteorologist for Telvent DTN, a private weather firm.

Yet, futures prices could feel support from strong demand for U.S. soybeans, traders said. Weekly U.S. soybean export sales for the week ended Jan. 13 totaled 915,400 tons, above estimates for 400,000 to 750,000 tons. China was the top buyer, snapping up 493,100 tons, according to the U.S. Department of Agriculture.

In other news, traders are waiting for private analytical firm Informa Economics to update its estimates for 2011 U.S. farm plantings around 11:30 a.m. EST. The firm last month projected farmers would plant 77.57 million acres with soybeans this spring, up from its November estimate of 75.8 million and on par with 2011 plantings of 77.7 million.

Farmers need to plant a large soy crop to replenish supplies that have been drained by strong demand, analysts said. They are considering whether to increase corn plantings, at the expense of soy acres, because corn prices are also above two-year highs.

-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com



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