Exporters at the U.S. Gulf are paying between 70 and 73 cents over March soybean futures to secure available supplies, an increase of two cents from last week, according to U.S. Department of Agriculture data. Increasing concerns about South America's soy crop, particularly in Brazil, is fueling optimism about U.S. export demand.

That optimism has been fed by a series of export announcements this week, including one Wednesday saying China purchased 116,000 metric tons of soybeans for the current marketing year. That purchase follows previous announcements of 215,000 metric tons sold to unknown destinations this week, also for the current marketing year.

Sales for the current marketing year are considered a more significant indicator of demand, as deferred purchases are often cancelled. Traders also were awaiting word on more export sales to China stemming from a Chinese delegation's visit to Iowa Wednesday.

The increasing near-term demand for soybeans also is reflected in a major shift in the spread between March and November futures, traders said. March soybeans, which traded at an 8 1/2-cent discount to November soybeans a week ago, closed three cents above the November contract Wednesday. Spot soybean futures hit a fresh four-month high Wednesday.

The strength in March is "indicating the South America crop continues to get smaller," Mike Anderson, a senior risk manager for the Andersons Inc., said in a commentary Wednesday.

Interior basis levels, while showing some signs of weakness over the past week, generally have remained firm as futures have gained.

Nationally, cash soybean prices were 45 cents cheaper than futures, versus a 44 1/2-cent spread a week ago, according to an index maintained by the Minneapolis Grain Exchange. A year ago, that spread was 62 cents.

Corn-basis levels also have remained firm over the past week. Exporters are paying 72 to 77 cents over March corn futures to secure available supplies at the Gulf, up five to seven cents from a week ago.

Internally, the March futures premium of 12 cents over cash supplies was down 1/4 cent from a week ago and well below the year-ago premium of 41 1/4 cents, according to the national index maintained by MGEX.

The strong corn basis may have less to do with demand than with farmers' reluctance to sell after prices fell recently. Futures prices have been under pressure from USDA supply-and-demand estimates and the lack of any fresh supply worries to drive the market higher. Prices for corn and wheat have lagged recently while soybean futures have surged.

"Producers continue to be relatively light sellers," said Dave Marshall, an independent broker and adviser in southern Illinois. "They're waiting for a futures rally to make some additional sales."

-By Ian Berry, Dow Jones Newswires; 312-750-4072 begin_of_the_skype_highlighting 312-750-4072 end_of_the_skype_highlighting; ian.berry@dowjones.com