Jan. 23 (Bloomberg) -- Soybeans fell, capping the second straight weekly decline, on speculation that rains will revive newly planted crops in Argentina and Brazil, the two biggest sellers of the oilseed after the U.S.

Fields in Argentina, where farmers won’t finish planting until next month, may get as much as 2 inches (5.1 centimeters) of rain starting Jan. 25, said Allen Motew, a meteorologist at QT Information Systems Inc. in Chicago. Crops will be helped by two more storms before Feb. 5, he said. Favorable conditions will prevail in the major growing areas of Brazil, where farmers mostly finished planting last month, Motew said.

“Rain in the forecast encouraged some late selling,” said Anne Frick, a senior oilseed analyst for Prudential Financial in New York. “Demand is weak, and I would be more bearish on soybeans without the drought in Argentina.”

Soybean futures for March delivery fell 3 cents, or 0.3 percent, to $10.09 a bushel on the Chicago Board of Trade, after earlier rising as much as 2.2 percent. The most-active contract fell 1.1 percent this week and is down 38 percent since reaching a record $16.3675 on July 3.

Prices earlier rose after the Buenos Aires Cereals Exchange said soybean production in Argentina may fall as much as 25 percent. This year’s crop will be 17 percent to 25 percent lower than last year, exchange President Ricardo Forbes wrote in an undated editorial on the exchange’s Web Site.

The exchange also forecast a 40 percent drop in corn production in Argentina, where crops sown by November already are pollinating and were more exposed than soybeans to damage from hot, dry weather in the past month.

Bigger Crop

Predicting a 25 percent decline in soybean production to 34.7 million metric tons from 46.2 million harvested last year may be premature, Frick said. Rains the next two weeks may revive crops that are just beginning to sprout pods and will fill them with beans next month, she said.

Argentina will harvest no less than 40 million tons this year with continued dry weather and the crop may be as large as 45 million tons, Frick said. The U.S. Department of Agriculture, in a Jan. 12 report, forecast 49.5 million tons.

“The market had a pretty tepid response to the crop problems in Argentina this week,” Frick said. “If the rains materialize, prices could fall to $9 or even $8” a bushel because usage is also slowing, Frick said.

Soybeans, the second-biggest U.S. crop, were valued in 2007 at $26.8 billion, government figures show. Corn was the largest at $52.1 billion.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.

Last Updated: January 23, 2009 16:48 EST