SINGAPORE: US soybeans rose on Tuesday for a second straight day as concerns over dry weather in South America supported the market but the gains were capped by economic uncertainty fuelled by Europe's debt crisis.
Wheat edged higher, ending a four-session losing streak, while corn gained 0.3 percent on bargain-hunting after losses in the aftermath of a US Department of Agriculture report that predicted higher grain and oilseed supplies.
"Soy is a key player at the moment, it is recovering from Friday's losses due to some concerns about South American crop weather," said Ker Chung Yang at Phillip Futures in Singapore.
"The market is also looking at Chinese buying, November imports were higher."
Chicago Board of Trade January soybeans rose 0.3 percent to $11.15 a bushel by 0257 GMT. Wheat for March delivery added 0.3 percent to $5.95-3/4 a bushel and March corn also gained 0.3 percent to $5.95-3/4 a bushel.
Chicago soybeans are being supported by bargain buying as well as some worries about the developing crop in South America.
The Brazil soy crop will turn out 73.1 million tonnes of soy in the 2011/12 season, consultancy AgRural said, half a million tonnes less than its November view, due to the smaller area it now expects to be planted.
Planting of the new crop is winding down across Brazil's center-west and southern soy belt, where rains started off steady across the entire soy belt in October but have been lower than average in the southernmost producer state of Rio Grande do Sul in the past weeks.
China, the world's largest soy buyer, imported 5.70 million tonnes of soybeans in November, up 49.6 percent from 3.81 million in October, figures from the General Administration of Customs of China showed.
Still, gains in soy, corn and wheat futures were limited by fears of euro zone ratings downgrades.
Asian stocks sank on Tuesday and the euro languished near a two-month low as investors took fright at the prospect of mass euro zone sovereign ratings downgrades after the outcome of a "last chance" European Union summit failed to convince markets.
Commodities were also abandoned and the "risk" currencies of big resource producers such as Australia nursed heavy losses as investors huddled in the relative safety of the dollar, lifting both the US currency and Treasuries.
US grain and oilseed futures have been under pressure as a result of higher supplies forecast by the US Department of Agriculture in its report on Friday. It unexpectedly raised its estimate of corn supplies and boosted its stocks forecast for soybeans and wheat more than expected.
Poor export demand for US commodities keyed the bigger-than-expected stocks forecasts as high prices for US grains have caused overseas buyers to look elsewhere to fill their supply needs.
The market is awaiting results from a wheat import tender issued by Egypt, the world's top importer, to buy an unspecified amount from global suppliers for March 1-10 shipment.
Rain and some snow were expected in the US Midwest and Plains over the next two weeks and temperatures will not be cold enough to harm the dormant winter wheat crop, according to an agricultural meteorologist.
Commodity funds bought a net 4,000 CBOT soybean futures contracts on Monday, trade sources said. They were even in corn and sold 1,000 wheat.
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