By Michael Hirtzer

CHICAGO, Jan 5 (Reuters) – U.S. corn, soybeans and wheat rallied on Wednesday a day after a sell-off in commodities drew investors to grains, with soybeans surging 1.7 percent on talk of Chinese demand and concerns over Argentine crop weather.  U.S. corn futures rose after hitting a two-week low early even as the dollar rose about 1 percent on signs of an improving U.S. economy. [USD/]    Wheat futures also climbed after opening lower, led by futures for higher-protein wheat at the Kansas City exchange.    “Nothing has changed fundamentally. Everything went down on profit-taking and liquidation but the fundamentals are still bullish,” said Matt Pierce, analyst for Wheat prices have been supported by excessive rains in Australia downgrading the wheat quality, while hot, dry weather in Argentina has supported both corn and soybean futures.

Chicago Board of Trade March soybeans were 19-1/2cents higher at $13.89 per bushel and March corn up 3-1/4cents to $6.11-3/4 as of 10:50 a.m. CDT (1650 GMT).    CBOT March wheat was up 4 cents at $7.93-1/4 and KCBT March wheat  up 7 cents at $8.56-1/4. Light showers this week benefited the pollinating corn crop in Argentina, but more dry weather is forecast and that could stress soybeans as the crop begins to set pods, said Don Roose, analyst at U.S. Commodities in West Des Moines, Iowa.    “The soybeans still have the crucial time frame to go through yet (in Argentina) and we’re supposed to warm up again,” Roose said.    “So it goes back to some of the same factors: China underneath the market on these breaks and we’re still not sure of the supply out of South America,” he said.  China was seeking shipments of U.S. soybeans for shipments in March and November and also shipments from Brazil this spring, analysts and traders said.  Jeffrey Currie, Global Head of Commodities for Goldman Sachs, on Wednesday said soybeans are a more attractive investment than wheat due to greater potential demand growth and limited supply base.  Soybean and corn futures eased for the first two days of the week after each commodity hit 29-month highs.    Investment funds have been heavy sellers while index fundshave also started to rebalance commodity holdings.    The dollar index  touched a one-week high following news that the U.S. private sector added more jobs than analysts expected. A stronger dollar makes U.S. commodities less attractive to exporters.    But commercial firms bought soybean and corn futures to take advantage of the break in prices.  “The market has been down three days in a row, it was hit hard so it’s due for a correction. Also, commercials were buying beans yesterday and again today,” said Glenn Hollander of Chicago cash grain house Hollander-Feuerhaken.    “We saw a broad-based commodities sell-off yesterday and the pressure is continuing today as the dollar is a bearishfactor for commodities,” said Ker Chung Yang, an analyst at Phillip Futures in Singapore. “For grains, losses should be capped because of unfavorable weather in U.S., eastern Australia, China and Russia. The weather issue is still lingering and investors can’t really overlook it.”  Grain and soy markets are unlikely to fall too far going into the U.S. Department of Agriculture’s Jan. 12 monthly supply and demand report, analysts say.