(Reuters) – USDA could further cut south American soy output f’cast * US farmers start corn planting weeks earlier * Strong oilseeds complex supporting soybeans By Mayank Bhardwaj NEW DELHI, March 26 (Reuters) – U.S. soybeans inched up on Monday after rising more than 1 percent in the previous session due to lingering concerns about the drought-induced cut in South American crops and signs U.S. farmers may plant more corn at the expense of the oilseed. Corn and wheat futures, however, were slightly lower, as favourable weather conditions in the United States raised output prospects in the world’s top exporter of both grains. The Chicago Board of Trade’s benchmark May soybean contract rose 0.5 percent to $13.73 a bushel by 0434 GMT, its second consecutive gain in as many sessions. The most active September soyoil contract on the Dalian Commodity Exchange gained 1.3 percent. May corn lost 0.1 percent to $6.45-1/2 a bushel, while wheat dropped 0.2 percent to $6.52-1/2 a bushel. Traders expect the United States Department of Agriculture (USDA) to further cut estimates of soybean output from Brazil and Argentina because of a severe drought. Brazil and Argentina together make up almost half of the world soybean output. The USDA report is due to be released on March 30. “The USDA is likely to lower its forecast for soy production in South America and that is the biggest support to prices in Chicago,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia. On Thursday, Argentina lowered its 2011/12 soy harvest forecast to 44 million tonnes from a previous estimate of between 43.5 million and 45 million tonnes. Oilseeds analyst Oil World also cut its forecasts for Brazil and Argentina in a report issued last week. Reports that U.S. farmers are favouring corn at the expense of soybeans are also supporting prices, traders said. The warmest March since records began in 1971 is encouraging farmers to plant corn early, as this usually leads to higher yields. The USDA will also release its plantings report on Friday. “The market is expecting a very good corn yield as we know that U.S. farmers have opted for early planting,” Mathews said. Higher prices of other edible oils was also increasing demand for soybeans, and supporting prices, traders said. Malaysian palm oil futures rose to a nine-month high on Friday, as an upbeat demand outlook supported prices and investor optimism returned after earlier fears of a slowdown in global growth and commodity demand.
