U.S. soybeans climb as Argentina drought worries persist

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Chicago soybean futures were firmer in Asian trading on Monday on worries over a sharp reduction in production in drought-hit Argentina despite some relief from recent rains, with strong U.S. exports also providing support.

Wheat futures rose as a cold snap in the U.S. Plains fanned concerns about supply along with potential escalations in the Russia-Ukraine conflict.

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Corn prices also advanced as traders watched for signs of fresh demand from China.

The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 1% at $15.24-1/2 a bushel, as of 0522 GMT.

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“In the short term, the market is expected to continue to be supported by the sharp reduction in soybean production in Argentina,” Zhongzhou Futures analysts said in a note.

Months of drought have delayed planting and prompted a reduction in projected harvests in the South American country, the world’s largest exporter of processed soy and third-largest corn exporter.

Recent rains, however, had brought badly needed relief to parched lands.

Strong U.S. soybean exports this month and technical buying have also provided support to prices at above the $15 a bushel mark, Zhongzhou analysts said.

Wheat rose 0.5% to $7.53-3/4 a bushel, while corn gained 0.4% to $6.85-1/2 a bushel.

Large speculators raised their net long position in CBOT corn futures in the week ended Jan. 24, regulatory data released on Friday showed.

China is likely to import a “substantial amount” of Brazilian corn, according to a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service post in Beijing.

The USDA has confirmed a flurry of private sales of U.S. corn and soybeans in recent days.

Analysts said the grains markets also received additional support from concerns that the crops of key supplier Ukraine would be smaller due to the war, and that Russia’s crop also would fall below expectations. (Reporting by Enrico Dela Cruz in Manila; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

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