GRAINS-Soybeans relieve South American rainfall; wheat, maize nearly even

By Christopher Walljasper

CHICAGO, Dec. 22 (Reuters)Chicago soybean futures fell on Thursday, under pressure from South American forecasts of additional rains that could relieve parched soybean crops in Argentina.

Corn and wheat weakened, retaining some of the previous day’s gains as extreme winter weather threatens winter wheat crops in the US Plains and Midwest.

Chicago Board of Trade’s most active soybean contract Sv1 fell 12 1/2 cents to $14.72 a bushel.

Corn CV1 ended down 1-3/4 cents at $6.60-1/2 a bushel, after climbing to $6.64-3/4, its highest level since Dec. 1.

Wheat Wv1 fell 5 1/2 cents to $7.62 1/2 a bushel, after climbing to $7.77 a bushel, its highest since Dec. 2.

“We had unexpectedly heavier rains in Argentina overnight. The forecast has gotten a bit wetter going forward,” said Karl Setzer, commodity risk analyst at Agrivisor. “Part of the risk premium that was put on the market yesterday, we are withdrawing.”

Brazil, the world’s largest soybean exporter, is suffering much less from the dry weather and is expected to start harvesting soybeans by the end of January, capping gains in US futures.

Wheat traders are watching for forecasts of well-below-freezing temperatures across the U.S. Heartland in the coming days, which could threaten winter crops not insulated by snow cover.

“That’s pretty extreme. I’m surprised we haven’t seen a bit more short hedging in some of our wheats,” said Dan Hussey, senior market strategist at Zaner Group.

Winter damage is hard to detect until the end of the season, Setzer said, which may explain why traders aren’t reacting more to the threat.

Corn and soy export sales plunged into the bottom of business estimates during the week ended December 15.

U.S. exporters sold 876,000 tons of soybeans last week, against trade expectations of 800,000 tons to 1.4 million tons, the U.S. Department of Agriculture said.

Maize export sales totaled 636,800 tonnes, near the bottom of trade forecasts of 625,000 to 950,000 tonnes.

Exporters sold 334,200 tons of wheat, in line with analysts’ forecasts of 200,000 to 550,000 tons.

(Reporting by Christopher Walljasper in Chicago;)

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