Chicago Board of Trade (CBOT) grains futures closed lower in the week, with soybeans futures dropping nearly two percent on improved weather in South America.

The most active corn contract for March delivery added 4.5 U.S. cents weekly, or 1.29 percent, to 3.52 dollars per bushel. March wheat delivery went up 6.5 cent, or 1.55 percent, to 4.2475 dollars per bushel. January soybeans dropped 17.75 cents, or 1.84 percent, to 9.495 dollars per bushel over the week.

March corn ended higher amid the late week strength, as U.S. export sales show signs of life following a quick and dramatic rally in South American cash corn markets. Amid U.S. Gulf corn is the cheapest in the world, downside risk over the next 30 to 45 days is limited.

As for international market, Argentine soil moisture has improved slightly in the east, but widespread shortages exist in central and western crop areas. Argentine planting progress surged this week, but the harvest won’t be fully completed until late July.

Wheat futures ended higher on modest fund short covering and better than expected weekly U.S. export sales. Russian remains a dominant world wheat exporter amid abnormal warmth, but the U.S. Gulf market is much more competitive with EU and Australian origins.

Also, unlike prior short covering rallies, the U.S. cash market seems to be leading the way. Hard red wheat basis in Kansas City rests at a three-year high this week, and all cash grain prices except corn are inching higher.

Drought continues to build across the Central U.S., limited rain or snow is offered to the hard red wheat belt in the next two weeks and the winter of 2017/18 looks to be marked by bouts of excessive cold.

Thin volume and limited news extended the bearish trend, and soybean prices were lower at week’s end.

Fundamentally, U.S. soybean supplies are known to be larger, while the largest unknown for the market is the remainder of the South American growing season, and whether La Nina will limit rains in early 2018.

The U.S. export pace remains well behind last year, but good Chinese demand was noted on this week’s break, export sales announcements totaling 648,000 tonnes of old crop and and an additional 145,000 tonnes of new.