By Jesse Newman

CHICAGO--Soybean futures dropped to a three-week low Tuesday as better-than-expected crop yields in South America fueled concerns over demand for U.S. supplies. Wheat also declined while corn gained.

Soybean prices fell to the lowest level since late January, buffeted by favorable weather in South America, which is boosting crop yields in that region and driving worries over U.S. export demand. Crop-friendly weather is expected to help Brazilian farmers bring in a record soybean harvest this year, while Argentina's crop is recovering from wet weather earlier in the season that drowned some fields.

That's prompting fears that bigger-than-anticipated South American crops could hamper U.S. soybean exports, especially if rival shippers are able to offer the oilseeds at a discount to domestic rations.

Soybean futures for March delivery declined 6 1/4 cents, or 0.6%, to $10.26 1/4 a bushel at the Chicago Board of Trade, the lowest closing price since Jan. 31.

Corn prices edged higher after falling for two consecutive sessions, buoyed by evidence of ongoing demand for U.S. grain supplies. The U.S. Department of Agriculture on Tuesday said private exporters had booked roughly 380,500 metric tons of corn for delivery to Japan and unknown destinations for the 2016-17 and 2017-18 crop years.

Export sales shored up the corn market despite pressure from a stronger U.S. dollar, which dented U.S. corn's competitiveness on the global market.

CBOT March corn added 1 cent, or 0.3%, to $3.69 1/4 a bushel.

Wheat prices slid to a two-week low as the greenback rose and traders eyed warm weather in the U.S. Midwest, which is driving some winter grain varieties out of dormancy earlier than normal. Faster growth of winter wheat crops could leave them vulnerable to a cold snap, analysts said, though forecasters are not calling for such an event.

CBOT March wheat fell 5 cents, or 1.1%, to $4.36 a bushel.

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

(END) Dow Jones Newswires

February 21, 2017 15:55 ET (20:55 GMT)