(Recasts with U.S. trading, adds new analyst comment; changes byline/dateline; pvs PARIS)
By Mark Weinraub
CHICAGO, Feb 12 (Reuters) - U.S. soybean futures rallied on Monday, led higher by a surging soymeal market, on fresh concerns about hot and dry weather limiting crop production in Argentina, traders said.
Wheat futures also rose, with the benchmark Chicago Board of Trade March futures contract gaining 2.1 percent on support from dry conditions that were threatening yields in the U.S. Plains.
The strength in wheat and soybeans spilled over into the corn market but the yellow grain’s gains were capped by technical selling when prices neared the 5-1/2-month high hit last week.
Concerns about Argentine weather allowed trades to shrug off news that China, the world’s top buyer of soybeans, canceled export deals to buy 455,000 tonnes of U.S. soybeans for delivery during the 2017/18 marketing year.
“Dry weather is expected this week, which will allow dryness to increase again, stressing corn and soybean development,” Kyle Tapley, meteorologist at Radiant Solutions said in a note to clients.
At 10:54 a.m. CST (1654 GMT), CBOT March soybean futures were up 8-1/2 cents at $9.91-1/2 a bushel. The contract hit a high of $10.04-1/4 but struggled to hold support above $10.00 a bushel.
Soymeal futures were up 2.7 percent at $353.10 a ton, with the most-active contract hitting its highest since July 2016.
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 ups and downs,” Sebastien Poncelet of consultancy Agritel said.
Strong weekly export data also underpinned the soybean market.
USDA on Monday morning reported weekly soybean export inspections of 1.319 million tonnes, topping analysts’ forecasts that ranged from 800,000 to 1.1 million tonnes. Wheat export inspections were 487,902 tonnes and corn export inspections were 835,131 tonnes. Both were in line with a range of analysts’ forecasts.
CBOT March soft red winter wheat was up 9-3/4 cents at $4.58-3/4 a bushel.
Drought affecting parts of the U.S. Plains hard red winter (HRW) wheat belt 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.
CBOT March corn futures were 2-3/4 cents higher at $3.64-3/4 a bushel. (Additional reporting by Colin Packham in Sydney and Gus Trompiz in Paris, editing by David Evans and Tom Brown)