CHICAGO, Jan 5 (Reuters) - U.S. 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 U.S. exports.
Wheat futures fell as traders locked in profits with the market set to notch its third straight week of gains. Corn futures were close to unchanged.
Soybean gains were kept in check by export concerns that cast a bearish tone across the agricultural market following a report that showed weekly export sales fell well below market expectations. Wheat and corn export data also was seen as disappointing.
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 in that key export country.
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.
"It is all about the weather in South America," said Don Roose, president of Iowa-based U.S. Commodities. "We are supposed to have some showers next week but it is key that we actually get those showers."
Weather forecasters also warned that hot weather could blunt the benefits of any rainfall.
Chicago Board of Trade March soybean futures settled up 3 cents at $9.70-3/4. The most-active contract hit its highest since Dec. 14.
CBOT March soft red winter wheat futures were 3-1/4 cents lower at $4.30-3/4 a bushel. Wheat has risen 3.0 percent during its three weeks of gains.
Wheat added to a marginal overnight loss after the U.S. Department of Agriculture (USDA) reported export sales of U.S. 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 this week's frigid temperatures damaged crops already struggling with persistent dry weather.
CBOT March corn futures settled up 1/4 cent at $3.51-1/4 a bushel. Deferred contracts were flat to slightly weaker.
Corn had traded modestly higher during the overnight session but gave up their gains 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 560,800 tonnes, just below the low end of market expectations. (Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; editing by Susan Thomas and Chizu Nomiyama)