May 29, 2018 / 9:35 PM / 7 months ago

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

 (Updates with closing CBOT prices, USDA crop progress figures)
    By Julie Ingwersen
    CHICAGO, May 29 (Reuters) - U.S. corn futures fell about 1.5
percent on Tuesday, with the front contract at times 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.
    Chicago Board of Trade July corn settled down 6 cents
at $4.00 per bushel after dipping to $3.97-1/2, its lowest since
May 18. July wheat ended down 6-1/2 cents at $5.36-1/2 a
bushel and July soybeans fell 11 cents at $10.30-1/2 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. After the CBOT
close, the U.S. Department of Agriculture rated 79 percent of
the U.S. corn crop as good to excellent, topping a range of
analyst expectations and the year-ago rating of 65 percent.

    Wheat futures 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 transport
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 settlement prices:   
                         Last      Net     Pct   Volume
                                change  change  
 CBOT wheat     WN8    536.50    -6.50    -1.2   132759
 CBOT corn      CN8    400.00    -6.00    -1.5   223187
 CBOT soybeans  SN8   1030.50   -11.00    -1.1   108111
 CBOT soymeal   SMN8   380.20    -0.10     0.0    55257
 CBOT soyoil    BON8    31.21    -0.13    -0.4    44117
    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 Chizu Nomiyama and James
Dalgleish)
  
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