PARIS/SINGAPORE: Chicago soybean futures edged higher on Tuesday after a two-session slide, with heavy rain in major exporter Argentina bringing weather risks back into focus.
Gains were limited by overall expectations for large soybean harvests in Argentina and Brazil, as well as a sharp rise in the dollar that makes US grains more expensive overseas.
Chicago corn inched higher like soybeans but wheat eased for a third consecutive session.
Both cereals were consolidating below multi-month highs set last week during rallies fuelled by investment fund covering that analysts said were at odds with large global inventories.
Chicago markets were resuming trading after a three-day weekend including Monday's US Presidents Day holiday.
The Chicago Board Of Trade most-active soybean contract was up 0.5 percent at $10.37-3/4 a bushel by 1249 GMT, recovering from a near two-week low of $10.31 touched on Friday.
CBOT corn added 0.3 percent to $3.69-1/4 a bushel, and wheat fell 0.3 percent to $4.39-1/2 a bushel.
Heavy rains over the weekend soaked some soybean crops in Argentina. Local weather analysts said the moisture was probably beneficial for soy and corn crops, but the grain markets are sensitive to rainfall after flooding in January hit soy belts.
"South America is very a important region for soybeans and when you see reports of weather and flooding, you are going to get a price response," said Phin Ziebell, agribusiness economist at National Australia Bank.
"How much of that results in yield losses remains to be seen."
Rain in neighbouring Brazil could also slow harvest progress, which has been running ahead of the average pace.
Analysts said grain markets were lacking impetus after investment fund flows slowed after a rally earlier this month.
The US Commodity Futures Trading Commission's weekly Commitment of Traders report, released after the close of the market on Friday, showed speculators expanded their net long position in CBOT corn futures to nearly 81,000 contracts in the week to Feb. 14, their biggest net long since July.
Traders were also looking ahead to acreage forecasts from the US Department of Agriculture's annual outlook forum this week, to gauge an expected drop in US wheat sowings and a shift from corn towards soybeans.
"The decline in US sowings, along with tight European stocks, is among fundamental factors that should limit downside in wheat prices," consultancy Agritel said in a note.
"But as things stand, potential upside also remains limited in the absence of serious weather incidents."
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