Soy rallies on South American weather concerns

PARIS/SINGAPORE, Jan 3 (Reuters) – Chicago soybean futures prices rose by about 1.5% on Monday, supported by weather risks for South American crops as well as supply concerns in vegetable oil markets.

Corn rose, also underpinned by dry conditions in parts of South America, while wheat was steady.

The most active soybeans contract on the Chicago Board of Trade (CBOT) was up 1.5% at $13.59-1/2 a bushel by 1340 GMT.

Rain relief in parched southern Brazilian growing belts weighed on prices late last week, but forecasts for hot, dry spells in Argentina this month has raised fears over potential yield losses in South America.

In Argentina, moisture deficits could expand to affect more than half of corn and soybean crops by next week, the Commodity Weather Group said in a note.

Traders were also assessing whether showers in southern Brazil could avert further drought losses and whether favourable soybean conditions further north will compensate for any poor southern yields.

Palm oil, which competes with soybean byproduct soyoil, rallied 3.3% on supply concerns.

CBOT corn was up 0.7% at $5.97-1/2 a bushel after giving up some of its earlier gains as it faced chart resistance at the $6 threshold.

Corn futures, which climbed more than 20% in 2021, have also found support in a rebound in the ethanol sector and brisk export demand.

CBOT wheat , which also gained about 20% last year, was up 0.2% at $7.72-1/2 a bushel.

The wheat market was continuing to weigh bumper harvests arriving in Argentina and Australia against strong importer demand and export restrictions in top supplier Russia.

Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore
Editing by Sherry Jacob-Phillips and David Goodman

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