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GRAINS-Soy markets rally as South America weather worries return

* Spot soybeans hit $10 mark, soymeal sets contact highs

* Argentina crop belt to stay dry despite weekend rain

* Rain hampering Brazilian soybean harvest

* Corn also supported by South America weather threats

* Wheat tracks gains, dry U.S. conditions underpin

(Updates with European trading, changes byline/dateline) PARIS, Feb 12 (Reuters) - U.S. soy futures climbed sharply on Monday, with soybeans testing the $10 barrier and soymeal setting contract highs, as concern over drought in Argentina and excess rain in Brazil came back to the fore. Corn and wheat also rose, supported by weather risks to South American and U.S. crops, respectively, while an easing dollar further bolstered Chicago grain futures. The most active soybean futures contract on the Chicago Board Of Trade was up 1.8 percent at $10.00-3/4 a bushel as of 1150 GMT. It earlier reached its highest since Jan. 30 at $10.02-3/4. Soymeal futures set several life-of-contract highs, including a peak of $351.6 per ton for March. After rain late last week calmed investor worries about crop damage in Argentina, forecasts calling for a drier week ahead and potentially scorching temperatures stirred up the market again on Monday. "We're in a weather market with its up and downs," Sebastien Poncelet of consultancy Agritel said. "We're seeing both a lack of moisture in Argentina, with the weekend showers far from sufficient, and too much rain in Brazil." Further yield losses are likely for Argentine corn and soybean crops due to the persistent dryness while in Brazil wet weather will delay soybean harvesting and planting of the second corn crop, Thomson Reuters Agriculture Research analysts said in a note. Traders will be monitoring weather conditions in Argentina, given projections for rainfall in Argentina next week and divergences on temperature forecasts for the coming days, Poncelet added. The most active CBOT corn futures gained 1.0 percent to $3.65-1/2 a bushel, recovering its losses from the last session. CBOT wheat climbed 1.7 percent to $4.56-3/4 a bushel, also recouping a similar-sized loss from the previous session. Drought affecting parts of the U.S. Plains hard red winter (HRW) wheat belt was continued to lend background support to wheat. "There is concern about HRW wheat in the U.S. that is underpinning prices, although the crop situation is far from irreversible," Poncelet said. Grain markets have also been supported by bouts of short-covering by investment funds holding large short positions.

Prices at 1150 GMT

Last Change Pct End Ytd Pct Move 2017 Move CBOT wheat 456.75 7.75 1.73 427.00 6.97 CBOT corn 365.50 3.50 0.97 350.75 4.21 CBOT soy 1000.75 17.75 1.81 961.75 4.06 Paris wheat Mar 160.00 1.00 0.63 159.00 0.63 Paris maize Mar 154.75 0.50 0.32 157.75 -1.90 Paris rape May 352.75 2.75 0.79 352.75 0.00 WTI crude oil 60.20 1.00 1.69 60.42 -0.36 Euro/dlr 1.23 0.00 0.30

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Additional reporting by Colin Packham in Sydney, editing by Tom Hogue and David Evans)