SINGAPORE/HAMBURG: Chicago soybeans remained around a four-month high on Wednesday, boosted by the prospect of more US exports as dry weather threatens crops in key South American producers including Brazil and Argentina.
Wheat and corn edged higher as the dollar weakened and outside markets provided support.
"Soybeans continue to get support from the concerns about damage to crops in South America," said Rabobank analyst Erin FitzPatrick. "The market is still trying to assess the level of crop damage in Brazil, Argentina and other producers."
"Wheat and corn are benefitting from a weaker dollar plus background strength in energy and equity markets."
Chicago Board of Trade March soybeans rose 0.5 percent to $12.61-1/2 a bushel at 1143 GMT. Chicago soybeans had on Tuesday touched $12.61-3/4, the highest spot soybean price on the continuous chart since Oct0ber 17.
"I think we could see upside potential for soybeans even from these current elevated levels," FitzPatrick said. "The tightening of South American soybean supplies is transferring export business to the US"
Chicago March wheat rose 0.5 percent to $6.38-3/4 a bushel, while March corn gained 0.3 percent to $6.35-1/2 a bushel.
European benchmark wheat, the Paris March contract, was down 0.4 percent at 210.00 euros a tonne in a lull after rising on technical factors on Tuesday.
The dollar index, which measures the greenback's strength against a basket of currencies, fell 0.4 percent, making US-dollar priced commodities more attractive for overseas buyers.
The euro and European equity markets were firmed on Wednesday by hopes of progress in the Greek bailout and better-than-expected growth figures for France and Germany.
Soybean markets received an additional boost from disruption in a Brazilian export port and prospects of large purchases by top soybean importer China during a visit to the US this week by China's Vice President Xi Jinping.
About a quarter of Brazil's shipments of soybeans and corn to world markets were disrupted on Tuesday, a day after a bulk carrier collided with and damaged a major grain terminal at Santos Port.
Last year, a Chinese trade delegation purchased 11.5 million tonnes of US soybeans valued at $6.7 billion during a visit to the United States. The USDA confirmed some of the sales the following day, rallying the market.
Any Chinese purchases would come amid forecasts of tighter supplies. Hamburg-based analyst Oil World cut its forecast of Brazil's 2011/12 soybean crop to 69.5 million tonnes from 70 million previously.
"The market is watching the situation in Brazil and Argentina: people still think that South American production is lower than what the USDA has estimated," said Brett Cooper, a senior manager of markets at FCStone Australia.
Soybean prices drew additional strength from fresh US export sales. The USDA confirmed sales of 283,000 tonnes of US soybeans to unknown destinations, including 215,000 tonnes for 2011/12 delivery and 68,000 for 2012/13.
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