BUENOS AIRES (Dow Jones)--Argentine soybean prices got a lift this week as analysts took a more pessimistic view of the drought damage suffered by South America's crops this season.

"Soybean futures closed higher in the face of new, lower forecasts for the South American crop which stoked investment fund buying," the Rosario Grain Exchange said.

Spot soybeans sold for 1,490 Argentine pesos ($340) per metric ton at the Rosario exchange on Wednesday, up from ARS1,440 last Thursday. Markets will be closed on Thursday and Friday for the Easter holiday.

On Tuesday, the Rosario exchange cut its forecast for 2011-12 soybean production by 1.4 million tons to 43.1 million tons.

And Wednesday, private analytical firm Informa Economics cut its outlook for Argentina's soybean harvest by 2.5 million tons to 45 million tons.

Argentina leads global soyoil and soymeal exports and ranks third in soybean exports.

Informa also cut its forecast for soybean output in Brazil, the world's second-largest producer, to 66.5 million tons from 68 million tons.

Global soy prices have been buoyed in recent weeks by signs that the soybean crops in both Argentina and Brazil will come in much lower than initially expected due to the drought, blamed on the La Nina weather phenomenon and the early arrival of cold weather.

A severe drought battered the 2011-12 soy crop in December and January, cutting yields and leading many Argentine farmers to put off planting. That means that a much larger share of the crop is late-planted soy, which is still developing and is vulnerable to cold. Farmers are beginning to harvest the early soy, but much will remain in the fields through as late as July.

Meanwhile, corn for July delivery traded at $172 per ton, compared to $170 a week ago for June corn.

Argentina is the world's second-largest corn exporter and the harvest is well under way.

July wheat traded for $180 a ton Wednesday, up from $170 a week ago.

Argentina is a leading global wheat exporter, with most shipments going to neighboring Brazil.