Soybeans hit 3-week high as Argentine weather worries return

CHICAGO: US soybean futures rose to their highest in more than three weeks on Friday, with traders focused on the South American weather outlook amid signs of weak demand for US exports.

Wheat futures fell as traders locked in profits with the market set to notch its third straight week of gains. Corn futures were also lower.

Export concerns cast a bearish tone across the agricultural market following a report that showed weekly export sales fell well below market expectations.

Forecasts called for widespread rain from the middle of next week in Argentina, but an overnight report from the Buenos Aires Grains Exchange shifted attention back towards dry weather risks.

The exchange said drought in Buenos Aires province could leave some of the 18.1 million hectares expected to be sown with soy this season unplanted, with 2.25 million hectares yet to be sown as the end of the planting window approaches.

"It is all about the weather in South America," said Don Roose, president of Iowa-based US Commodities. "We are supposed to have some showers next week but it is key that we actually get those showers."

Weather forecasters also said that expected showers may not be enough to reverse dryness in some areas due to warm temperatures.

At 9:42 a.m. CST (1542 GMT), Chicago Board of Trade March soybean futures were up 4-1/2 cents at $9.72-1/4. The most-active contract hit its highest since Dec. 14.

CBOT March soft red winter wheat futures were 5 cents lower at $4.29. Wheat has risen 2.5 percent during its three weeks of gains.

Wheat added to a marginal overnight loss after the US Department of Agriculture (USDA) reported export sales of US wheat of just 131,000 tonnes. Analysts forecasts for wheat export sales ranged from 225,000 to 500,000 tonnes.

Some traders played down the significance of the export figures which covered the Christmas holiday period.

Wheat remained underpinned by fears that frigid temperatures caused damage this week to crops already struggling with persistent dry weather.

CBOT March corn futures dipped 1/4 cent to $3.50-3/4 a bushel.

Corn futures had traded modestly higher during the overnight session but turned lower after the USDA report showed corn export sales of 101,200 tonnes, below forecasts for 600,000 to 1 million tonnes.

USDA also said that soybean export sales in the latest week totalled just 560,800 tonnes. Analysts' forecasts ranged from 600,000 to 1 million tonnes.