PARIS/SYDNEY: Chicago soybean futures extended a rally on Friday to hit their highest since June 2014 as persisting dryness in South American growing belts raised concern of tightening global supply at a time of brisk demand for U.S. soy.

Corn rose to a new two-week high, with brisk weekly U.S. export sales adding support.

Wheat was also firm.

The most active soybean futures on the Chicago Board Of Trade were up 0.9pc at $12.12 a bushel at 1154 GMT, after earlier rising to a 6-1/2 year high of $12.16-1/4.

"South American weather never quite plays ball," said Tobin Gorey, director of agricultural strategy at the Commonwealth bank of Australia.

"The just-in-time rainfall delivery in this hot southern summer means the market continues to walk a tightrope."

Forecasts of low U.S. soybean inventories amid strong demand from U.S. processors and importers like China have made the market sensitive to possible setbacks for South American crops due to be gathered in the coming months.

Argentine soy planting has been slowed by dryness, the Buenos Aires Grains Exchange said on Thursday.

While larger producer Brazil has seen heavier rain than its neighbour, traders are still cautious about the effects of drought at the start of the growing season.

"Grain markets continue to monitor weather events in South America as plantings in some regions begin to slow due to dryness," brokerage Allendale said in a note.

Higher than expected weekly U.S. soybean and corn exports, as reported by the U.S. Department of Agriculture on Thursday, also supported Chicago futures.

CBOT corn was up 0.2pc at $4.33-1/2 a bushel, close to an earlier two-week high. Wheat added 0.6pc to $6.12-1/2 a bushel.

Grain traders on Thursday reported delays in obtaining export documents from Russia's customs service, in the wake of measures including an wheat export tax announced this week to counter food price inflation.