HAMBURG: Chicago soybeans were firm on Tuesday, hovering near the highest in about five weeks hit the previous session because of possible soy crop losses in Argentina, while wheat and corn fell.
"Soybeans are being supported again by the fear that dryness could threaten the soybean crop in Argentina," said Matt Ammermann, commodity risk manager at INTL FCStone.
"Wheat and corn are both drifting down without major new supportive developments as both grains face a background picture of large global supplies," he said.
Grains powerhouse Argentina is the world's third largest exporter of soybeans and the world's largest exporter of soymeal, a key animal feed ingredient.
Chicago Board of Trade March soybeans were up 0.2 percent at 9.86-1/2 a bushel at 1141 GMT. The contract hit $9.87-1/4 a bushel on Monday, the highest since Dec. 14.
March soymeal was up 0.2 percent at $339.40 a tonne after hitting $339.60 earlier on Tuesday, its highest since Dec. 8. Soymeal had jumped 2 percent on Monday.
March wheat fell 0.5 percent to $4.23-1/4 a bushel, having closed up 0.7 percent on Monday. March corn fell 0.2 percent to $3.51-1/4 a bushel, having closed down 0.1 percent on Monday.
Argentine soy and corn farmers are facing yield losses this season due to dry, hot weather that persisted over the weekend and was expected to continue in days ahead, a Buenos Aires Grains Exchange weather consultant said on Monday.
Argentina is not in an actual drought but conditions are not optimal for crops, said consultant Eduardo Sierra.
"Parts of Argentina's soybean production regions are looking dry and a fear element is being put into prices today," Ammermann said.
"It is not yet clear if noticeable damage has taken place, but there is concern about damage and this is being reflected in soybean and soymeal prices. A reduced Argentine soybean crop could cut the country's huge soymeal exports in coming months."
For wheat, there are worries about dry weather in the US Plains but the crop's condition will be known only when it emerges from dormancy around March, analysts said.
"Wheat and corn markets are lacking energy today," Ammermann said. "Black Sea wheat prices are firm but Black Sea exports are still moving into world markets at high volumes despite the winter."
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