By Jesse Newman

CHICAGO--Soybean futures dropped to a seven-week low, buffeted by a firming U.S. dollar and speculation that domestic farmers will ramp up plantings of the crop this year.

Corn prices rose while wheat fell.

Soybean prices declined for the fourth consecutive session as the dollar shot to a more than 14-year high on strong economic data Tuesday. A vaulting greenback is unfriendly for agricultural markets as it makes farm goods -- including soybeans -- less affordable for overseas buyers. U.S. farmers are counting on foreign importers to soak up more than two billion bushels of soybeans during the current season, or almost half of the nation's record 2016 soybean harvest.

Pricesfor the oilseeds also suffered from mounting speculation that domestic growers this year will ramp up plantings of the crop, as soybean prices significantly outperformed corn last year, helping shore up the balance sheets for farmers navigating a multiyear downdraft in commodity prices.

Soybean futures for January dropped 9 3/4 cents, or 1%, to $9.86 3/4 a bushel at the Chicago Board of Trade, the lowest settlement price since Nov. 16.

Corn prices, conversely, gained to a two-week high due to short-covering by investors and expectations that corn acreage could drop this year as farmers cut back on seedings of the grain in favor of soybeans. Speculative investors like hedge funds and others are currently holding a large net-short position in the corn market, with some exiting bearish bets Tuesday in case prices rise, analysts said.

CBOT March corn advanced 3 3/4 cents, or 1.1%, to $3.55 3/4 a bushel, the highest closing price since Dec.16.

Wheat futures closed lower after climbing earlier in the session as forecasts for better weather in the U.S. wheat belt trumped short covering in that market. Prices for the wheat initially lifted as investors bailed out of bearish wheat bets during the first trading day of 2017. But the promise of warmer weather later in the month ultimately assuaged fears that cold temperatures would cause damage to crops and limit harvests, pressuring prices for the grain.

CBOT March wheat futures slid 1 1/2 cents, or 0.4%, to $4.06 1/2 a bushel.

Write to Jesse Newman at jesse.newman@wsj.com

(END) Dow Jones Newswires

January 03, 2017 16:04 ET (21:04 GMT)

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