Morgan Stanley cut its rating on soybean futures, saying it was "waiting for the other shoe to drop for prices", citing the elevated value of the oilseed compared with corn, for which the outlook is more "balanced".
The bank cut from neutral to neutral-bearish its rating on soybean futures, placing them alongside feeder cattle and lean hogs in its analysis of price prospects, but behind hopes for corn, cotton and wheat and, especially, live cattle, which it sees as one of the best bets in commodities.
The downgrade – which contrasts with a more upbeat analysis on soybean price prospects from Australia & New Zealand Bank - reflects concerns over the relatively resilient ratio of benchmark Chicago new crop soybean futures compared with their corn equivalents.
At 2.73, that is a historically high level, and not significantly below the 2.75 at which it stood before US Department of Agriculture data a week ago injected volatility into markets.
November soybean futures have dropped by 8% since the US Department of Agriculture a week ago pegged US sowings of the oilseed this year at a record 84.84m acres – 3.35m acres above market expectations.
However, December corn has fallen nearly as far, undermined by separate USDA data showing domestic inventories of the grain larger than expected as of June 1.
"New-crop grain prices tumbled after the USDA 'found' an additional 4.2m acres planted to the top four US crops in its Acreage report," Morgan Stanley said.
"Yet despite a 2.2m-acre upward surprise for soybeans (plantings], the November soybean: December corn ratio remains stuck above 2.7.
"With record US soybean output virtually assured, and South American planting economics skewed towards beans, we see downside to this ratio over the coming months."
The bank flagged the potential for a seasonal "pick-up" in Argentina's soybean crush as an extra pressure on prices.
Morgan Stanley raised by 124m bushels to 3.015bn bushels its forecast for world soybean inventories at the close of 2014-15, a figure only marginally below the USDA estimate.
The revision reflected an increase of 3m acres to 287m acres in the estimate for harvested area, after the US upgrade, with output pegged at 10.923bn bushels, a rise of 123m bushels on the previous forecast.
The bank sees soybean futures averaging $10.10 a bushel in 2014-15, a figure below the $11.51 a bushel it said was suggested by the futures curve.
It rates sugar as the most bearish bet in agricultural commodities, saying that "despite recent weather concerns, adequate early season sugar supply and limited global demand should continue to pressure sugar prices".
New York raw sugar futures will average 17.90 cents a pound in 2014-15, behind the 19.00 cents a pound the market is pricing in, Morgan Stanley said.