CHICAGO (Dow Jones)--U.S. soybean futures are expected to start Tuesday's day session slightly higher, supported by ongoing weather concerns for Argentina crops and weakness in the U.S. dollar.

Analysts project soybeans to open 1 cent to 3 cents higher on the Chicago Board of Trade. In overnight trading, the January futures contract, the most active contract, was up 2 1/4 cents at $13.04 3/4 a bushel.

Weather remains the dominant issue in the soybean market, with drier, warmer conditions for key Argentina crop areas keeping fears of lower production potential as underpinning features, said Don Roose, president of U.S. Commodities, a brokerage and advisory firm.

It is a necessity for South America to raise large crops this year to meet growing world demand, and the slightest indication they will not causes futures buying as a result.

The Telvent DTN weather forecast said Argentina's below- or well-below-normal rainfall pattern looks to continue. Temperatures are expected to vary somewhat with hot readings sometimes and much cooler temperatures at other times. Stress to crops will continue, likely reducing yield potential, Telvent added.

The market's void of fresh fundamental news is providing caution for buyers as traders look to book profits following Monday's strong gains, particularly in thinly traded markets ahead of the holidays.

Weakness in the U.S. dollar and solid export demand are seen providing further price strength. Nevertheless, with China's buying showing signs of slowing in recent weeks and rain chances improving for Argentina in longer-range weather maps, prices may hover near unchanged levels, Roose said.

There remain supportive features in the market, with outlooks for biofuel tax credits to be renewed by the U.S. Congress, but with China putting its cards on the table, setting a 4% inflation target for next year, speculation may cool down a bit, Roose added.

Traders said the market has adequately priced in recent supportive fundamental market features, and without new news, it may be tough to hold spot futures above the $13 a bushel level, as seen in prior weeks.

Soybean futures on the Dalian Commodity Exchange settled higher Tuesday tracking gains in bellwether Chicago futures overnight. The benchmark September soybean contract settled up CNY34, or 0.8%, at CNY4,425 a metric ton, after trading between CNY4,409 and CNY4,444/ton.

-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604;