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GRAINS: Soybeans drop as U.S. weather improves; corn, wheat firm

U.S. soybean futures fell 1.4 per cent on Tuesday as forecasts for cool temperatures and rain across the Midwest bolstered harvest prospects, traders said.

Corn and wheat edged higher, with corn snapping a six-session losing streak due to bargain buying and wheat rising for the third straight day as export demand heated up.

But the weather remained in focus, with the new-crop November soybean contract dropping to its lowest level since May 10.

“We are pricing in some better weather for beans,” said Mike Zuzolo, president of Global Commodity Analytics in Atchison, Kansas. “That’s where last week the trade worked on the corn extra-hard. This week it is beans’ turn to have weather premium taken out because of the rains coming across Illinois and Missouri and what looks to be Indiana later on today.”

The weather outlook blunted the strength in corn, which opened Tuesday near a three-year low.

“We are trying to bounce, but not doing a very good job of it. The reason why is, we’ve got one-inch rains moving through Missouri into Illinois,” said Terry Linn, a grains analyst with the Linn Group. “It is another reminder that our weather is pretty bearish. In general, we have got good crops coming. You put another rain on it and you are that much closer to making the crop.”

CBOT August soybean futures dropped 17-1/2 cents to $13.50 a bushel while the new-crop November contract lost 17 cents before settling at $12.03 a bushel.

CBOT September corn rose 6-1/4 cents, its biggest gain in two weeks, to $4.95-1/2 a bushel. The new-crop December contract gained 4-1/4 cents to $4.77-1/2 a bushel.

CBOT September wheat ended 3-3/4 cents higher at $6.55-1/4 a bushel. Wheat futures have risen for three days in a row, but prices were up just 0.8 per cent during that time.

“There seems to be some buying interest today as lower prices are shaking out some importer interest, with Korea in the market for corn, Taiwan buying wheat and both Egypt and Jordan tendering for wheat,” one European trader said.

Japan said on Tuesday it would resume buying U.S. western white wheat after halting imports of that variety for months following the discovery of an unapproved genetically modified strain in Oregon.

U.S. flour millers are reporting quality problems in the soft red winter wheat due to heavy rain, which soaked much of the Midwest crop in early July. The quality concerns could lend further support to prices as export demand ramps up.

China, which has been snapping up wheat cargoes from Australia and the United States, has bought more than 1.5 million tonnes of Australian wheat in the past six weeks, a Chinese official think-tank said on Tuesday. The country’s wheat imports are rising as frost and wet weather hurt the domestic crop, leaving about 16 per cent unfit for human consumption.

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