By Luzi Ann Javier Feb. 18 (Bloomberg) -- Soybeans and corn fell for a second day in Chicago as the dollar strengthened and favorable weather boosted crop prospects in Argentina. Corn for May delivery dropped 0.4 percent to $3.7025 a bushel on the Chicago Board of Trade at 12:11 p.m. Paris time. May-delivery soybeans slipped 0.1 percent to $9.605 a bushel, rebounding from a decline of as much as 0.3 percent. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, climbed as much as 0.4 percent. Gains by the dollar make U.S. crops more expensive for importers using other monies. A strengthening dollar “will certainly be bearish for commodity markets,” Michael Pitts, commodity sales director at National Australia Bank, said from Sydney. “Any favorable weather is just going to mean larger crops out of South America, and that’s going to create a lot of pressure on U.S. exports.” The U.S. grows 42 percent of the world’s corn and 36 percent of the soybeans, making it the biggest producer of both crops, according to the U.S. Department of Agriculture. The USDA raised its forecast for Argentine corn exports to 9.5 million tons on Feb. 9 from 7.5 million tons, which would make the country the second-biggest exporter after the U.S. Japanese Imports Argentina was forecast to have scattered showers and thunderstorms in major growing areas today, boosting crop development, agricultural information provider Telvent DTN Inc. said yesterday. Japan, the biggest corn importer, boosted its purchases of the grain from Argentina and Brazil on concern the quality of U.S. supplies may have deteriorated, Nobuyuki Chino, president of Unipac Grain Ltd. in Tokyo, said in an interview yesterday. Purchases from Brazil for shipment between January and June have risen to 500,000 metric tons, more than 10 times the volume sought in 2009, while orders from Argentina have reached 100,000 tons, close to the full year shipments posted last year, Chino said. Imports from South American countries may rise 1.2 million tons this year “if their prices are competitive with the U.S.,” Chino said. Japanese buyers are also concerned U.S. supplies may be contaminated with deoxynivalenol, a harmful mycotoxin produced by fusarium molds, said Chino, who has traded grains for three decades and worked for Continental Grain Co. of the U.S. before establishing his company in 1999. Spread of Vomitoxin Vomitoxin, a mold that develops during wet harvest seasons, has appeared in corn samples from eastern Nebraska to Ohio in “one of the worst outbreaks in the past 20 years,” Brian Richert, a Purdue University swine specialist in West Lafayette, Indiana, said Nov. 16. The mold can lead animals to eat less or not at all at levels of more than 2 parts per million in hog feed to about 10 parts per million in grain for cattle, Richert said. Vomitoxin is a type of mycotoxin. Wheat for May delivery fell 0.4 percent to $5.07 a bushel after sliding as much as much as 0.7 percent earlier. In Paris, milling wheat for March delivery dropped as much as 0.8 percent to 124 euros ($168.44) a ton on Euronext Liffe, the lowest price for the most-active contract since October, and was recently at 124.50 euros. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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