Soybeans for January delivery at the Chicago Board of Trade closed up 1 1/2 cents at $11.31 per bushel.

The gains were fueled by forecasts calling for dry weather in key growing areas in Argentina over the next several days, traders said. While the situation in South America is far from dire, traders say dry weather forecasts bear watching since the size of the crop there will have a big impact on demand for US soybeans.

South America is the main competitor for U.S. soy exporters, and soy futures have sagged throughout the fall due in part to poor export business, and worries that China was favoring South American supplies.

"It boils down to South American weather," said Dave Marshall, an independent commodity broker and advisor in southern Illinois. "If they have it, they ship it. If they don't have it, we ship it."

The dry weather is enough reason to price some risk into the market, particularly given soybean futures' slump in recent months, traders said.

Gains were limited by a stronger dollar, which helped push other commodities lower, including corn, wheat and rice.

The soybean market's upside is also limited by the ongoing weak export demand. Analysts are mostly expecting the U.S. Department of Agriculture to increase projected soybean stockpiles by 9.2% versus the agency's estimate last month, to 213 million bushels. Analysts said the USDA would likely cut export projections in the report, to be released Friday at 8:30 a.m. EST.

Corn export demand has also been disappointing recently, although many analysts think the USDA will leave its inventory outlook unchanged in Friday's report. Still, traders said there was little reason to buy corn Wednesday, particularly with the stronger dollar and worries about Europe's debt crisis.

CBOT December corn ended down 3 cents to $5.82 1/4 while March corn closed down 3 3/4 cents to $5.92 3/4.

The decline is disappointing for market bulls, who were hoping that the market's rebound Tuesday following a dip to multi-month lows would encourage buying among end-users and traders who follow technical trends.

Now technical charts are looking "increasingly bearish," Farm Futures said in an afternoon commentary.

"Consecutive closes above $6 (in the March contract) are needed to begin restoring confidence in the market," Farm Futures said.

Wheat futures also fell Wednesday, pressured by poor export demand. A flood of cheaper wheat around the world and the prospect of increased Russian exports in the year ahead are weighing on prices, traders said.

CBOT December wheat ended down 15 3/4 cents at $5.83 per bushel, while March CBOT wheat ended down 12 1/2 cents to $6.00 1/2. Kansas City Board of Trade December wheat fell 14 3/4 cents to $6.52 1/4 and MGEX December fell 7 1/2 cents to $8.46 3/4.