* Dry weather threatens corn, soy in Argentina
* Exporters sell U.S. soybeans to top importer China
* Wheat futures pull back after rising on Friday
By Tom Polansek
CHICAGO, Jan 28 U.S. grain and soybean futures
edged higher on Monday as traders worried dry weather will trim
output in Argentina, the world's top exporter of soy products
and second-largest corn supplier.
All eyes are on weather models as Argentina and Brazil must
produce large crops to meet strong demand for soybeans from top
Traders broadly expect large harvests in South America in
the coming months, but every twist in the weather is being
scrutinised amid tight global supplies.
After more than a month of almost unrelenting Southern
Hemisphere summer sunshine, corn and soy fields need new
moisture to ensure their healthy development.
"The rains haven't come yet," said Mike Krueger, president
of brokerage The Money Farm, which counts farmers in Argentina
among its clients.
Corn in Argentina will endure "a lot of pretty serious
stress" from dryness in the next three days before rain is
expected to fall, said Drew Lerner, president of World Weather
Inc. Soybeans also will suffer, he said, adding that crop
conditions will worsen if the weather stays dry in February.
At the Chicago Board of Trade, March soybeans rose 0.5
percent to $14.47-3/4 a bushel, and March corn jumped 1.2
percent to $7.29-1/4 a bushel. March wheat gained 0.4
percent at $7.79-1/4 a bushel.
Soybean futures were underpinned by firm cash prices and
talk that China will need to source higher volumes from the
United States in the near term as infrastructure bottlenecks
delay shipments from Brazil.
Brazil is forecast to surpass the United States as the No. 1
exporter and producer of soybeans this season, with a record
85-million-tonne crop that has already begun to be harvested in
top soy-growing state Mato Grosso.
Big trading houses are dispatching an armada of ships to
Brazil, hoping for a good spot in line to load up the record
Brazil's crop is 30 percent bigger than last year's, which
is good news for big importers like China. However, the South
American farming giant has added no new capacity to its ports.
Private exporters struck deals to sell 220,000 tonnes of
U.S. soybeans to China for delivery in the next marketing year,
the U.S. Department of Agriculture said on Monday.
The USDA said separately that 40.7 million bushels of U.S.
soybeans were inspected for export last week, within
expectations for 39 million to 43 million bushels.
Weekly U.S. export inspections were 22.3 million for wheat,
above expectations for 16 million to 20 million, and 21.1
million bushels for corn, above expectations of 8 million to 11
WHEAT EXTENDS GAINS
Wheat futures extended gains after rising 1 percent on
Friday on better-than-expected U.S. exports last week and
concerns about dry weather in the U.S. Plains.
Still, large overseas harvests are expected to compensate
for lagging production in the United States.
The front-month CBOT wheat contract is expected to end
2013 at $6.80 a bushel, down from the closing price of $7.78 at
the end of 2012, according to the average estimate in a Reuters
survey of analysts and traders.
Analysts see Chicago corn prices falling by 22 percent to
under $5.50 per bushel by year's end and soybeans by 17 percent
to $11.83 per bushel as world supplies are projected to recover.
Prices at 2:54 p.m. CST (2054 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 729.25 8.50 1.2% 4.4%
CBOT soy 1447.75 6.75 0.5% 2.0%
CBOT meal 420.30 3.90 0.9% -0.1%
CBOT soyoil 51.89 -0.21 -0.4% 5.6%
CBOT wheat 779.25 2.75 0.4% 0.2%
CBOT rice 1535.00 -13.00 -0.8% 3.3%
EU wheat 247.00 -0.25 -0.1% -1.3%
US crude 96.47 0.59 0.6% 5.1%
Dow Jones 13,893 -3 0.0% 6.0%
Gold 1655.09 -3.40 -0.2% -1.1%
Euro/dollar 1.3456 -0.0009 -0.1% 2.0%
Dollar Index 79.7850 0.0370 0.1% 0.0%
Baltic Freight 792 -6 -0.8% 13.3%