CBOT SOY OUTLOOK: Higher; Argentina Uncertainty, Asian Markets

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CHICAGO (Dow Jones)--U.S. soybean futures are expected to begin Tuesday's day session higher, rebounding from Monday's declines on lingering concerns about Argentina weather and higher Asian markets.

Analysts project soybeans to open higher on the Chicago Board of Trade. In overnight trading, the January future was up 2 3/4 cents at $13.73 a bushel, March soybeans, the most active contract, was up 2 1/4 cents at $13.81 1/4 a bushel.

Forecasts for heat to return to Argentina crop areas by the weekend are seen providing enough concern to offset some of Monday's bearish price action, analysts said.

After setting a 29-month high early Monday, futures retreated on expectations that Argentine farmers will see some relief from hot, dry weather that had supported futures prices recently.

Mixed signals from Argentina forecasts and traders taking a cautious approach heading toward next week's U.S. Department of Agriculture annual production, quarterly stocks and supply and demand reports are expected to underpin prices.

Nevertheless, weather forecasts in Argentina have turned slightly wetter with two chances of rain in the next 11-15 days, said Brian Hoops, president Midwest Market Solutions in a market note.

An upper level trough is expected to bring much cooler weather and a chance for rain to Argentina early this week, according to a weather forecast from Telvent DTN. The rain chance appears to be highest in the southern areas.

The 6-10 day outlook for Argentina does not look quite as hot or as dry as it did Monday, but the hot, dry trend is still there, Telvent added.

The market is expected garner support from strength in Asian markets overnight, with soyoil lifted by advances in world vegoil markets, with palm oil futures rallying to new highs on increased demand.

Crude palm oil futures on Malaysia's derivatives exchange hit a fresh 34-month high with support from short covering as soyoil and crude oil futures extended gains in Asia. The benchmark March contract on the Bursa Malaysia Derivatives ended MYR36 or 0.9% higher at MYR3,888/ton.

Meanwhile, light strength in crude oil and weakness in the dollar overnight will provide some support to soybeans as well, Doane Advisory Service said in a morning market note.

-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com



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