U.S. grain and soybean futures ended higher Tuesday, with soybeans and wheat leading the advances as sellers headed to the sidelines in the face of oversold conditions.

Soybean futures continued a recovery from a drop to a 14-month low early Monday, buoyed by fears that dryness in South America may be signaling a return of a La Nina weather pattern in Argentina and southern Brazil.

Investors added some risk premium to the market, as the potential for a La Nina pattern producing dryness issues down the road in South America raises demand prospects for U.S. supplies.

"The weather threat is being dialed into the trade, and probably helps explain the strength in beans, particularly its ability to fight the headwinds of strength in the U.S. dollar," said Mike Zuzolo, president of Global Commodity Analytics & Consulting in Lafayette, Ind.

The dominant issue facing the soybean market is South American weather, and with conditions turning a little more threatening in Latin America, traders view prices as oversold after slumping 13% in the past two months.

Traders are also encouraged by the ability of the market to find buyers after government forecasters estimated U.S. supplies 18% higher than prior forecasts on Friday.

U.S. wheat futures rallied, driven by traders covering short positions in the absence of fresh bearish news. Wheat was supported by optimistic outlooks for future demand, as U.S. offers for white wheat in the most recent Egyptian wheat tender were competitive, a signal that prices are near fair-market value, analysts say.

Spillover support from higher crude oil futures provided additional incentive for wheat traders to liquidate some of their large short positions, analysts added.

Corn futures edged higher, but remained the weakest of the three major crop futures. Corn's limited strength isn't surprising since investment funds are still long corn and export demand is slow.

Overall, the markets weren't presented with any new features to spur new buying, but there remains enough uncertainty to limit selling and stabilize prices, Zuzolo added.

CBOT January soybeans ended up 6 1/2 cents at $11.18 1/2 per bushel.

CBOT March corn ended up 1/2 cent to $5.94 1/2 a bushel. March CBOT wheat rose 6 1/4 cent to $6.00 1/2 a bushel, MGEX March wheat climbed 6 1/2 cents to $8.30, and KCBT March wheat ended up 3 3/4 cents to $6.56.

-By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com