May 29, 2018 / 6:35 PM / 3 months ago

GRAINS-Corn, soybeans sag on renewed U.S.-China trade jitters

 (New throughout; updates prices, adds quotes, changes byline,
changes dateline from previous HAMBURG)
    By Julie Ingwersen
    CHICAGO, May 29 (Reuters) - U.S. corn futures fell nearly 2
percent on Tuesday, with the front contract dropping below $4 a
bushel as U.S. trade tensions with China re-emerged, analysts
said.
    Wheat turned lower after climbing to multi-month highs, and
soybeans also slipped.
    As of 1 p.m. CDT (1800 GMT), Chicago Board of Trade July
corn was down 7-3/4 cents at $3.98-1/4 per bushel. July
wheat was down 8 cents at $5.35 a bushel and July soybeans
 were down 9-1/2 cents at $10.32 a bushel.
    Corn tumbled after the United States said it will continue
pursuing action on trade with China, days after Washington and
Beijing announced a tentative solution to their dispute and
suggested that tensions had cooled.
    China is the world's biggest soybean importer and the top
buyer of U.S. sorghum, a feed grain that competes with corn.
    The news appeared to trigger long liquidation in corn and
soybeans, markets in which commodity funds hold net long
positions.    
    A stronger dollar added to the negative tone, making U.S.
grains less competitive on the world market.
    "The dollar strength is a real anchor for all the trade.
Then you get kicked with the China trade headlines," said Don
Roose, president of Iowa-based U.S. Commodities.
    Also, traders believe the U.S. corn crop is off to a good
start, overcoming early planting delays in April. Ahead of the
U.S. Department of Agriculture's weekly crop progress report,
analysts on average expected the government to rate 72 percent
of the crop in good to excellent condition, up from 65 percent a
year ago. 
    Wheat followed corn and soy lower, retreating after the CBOT
July contract hit a 10-month high on concerns about dry
weather in Russia and elsewhere.
    Forecasts for beneficial rains in the northern U.S. Plains
spring wheat belt and possibly Canada added pressure.
    Soybeans declined but drew underlying support from logistics
problems in Brazil, where a truckers' strike has been slow to
unwind, even after the government agreed to subsidize diesel
prices in a bid to end protests.
    Soybean exporters are considering declaring force majeure on
shipments, a contractual clause that releases them from
obligations because of events beyond their control, according to
Anec, a trade group representing grains exporters such as Archer
Daniels Midland Co and Louis Dreyfus Co.
    "If it were not for the Brazilian strike woes going on,
beans could be much lower than they are," Futures International
analyst Terry Reilly said.
       
    CBOT prices as of 12:59 p.m. CDT (1759 GMT):  
                         Last     Net     Pct  Volume
                               change  change  
 CBOT wheat     WN8    534.50   -8.50    -1.6  120231
 CBOT corn      CN8    398.75   -7.25    -1.8  183315
 CBOT soybeans  SN8   1033.25   -8.25    -0.8   96258
 CBOT soymeal   SMN8   380.30    0.00     0.0   50050
 CBOT soyoil    BON8    31.21   -0.13    -0.4   39082
    NOTE: CBOT July wheat, corn and soybeans shown in cents per
bushel, soymeal in dollars per short ton and soyoil in cents per
lb.

 (Additional reporting by Michael Hogan in Hamburg and Colin
Packham in Sydney; editing by Alexandra Hudson and Chizu
Nomiyama)
  
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