Grain futures drop as hopes of China buying spree fizzle

* Corn gives up prior session's gains on cooler U.S. weather
* Wheat also weakens as northern hemisphere harvests advance
* Weekly crop progress report

(Updates prices, adds crop condition updates)
By Barbara Smith
CHICAGO, July 22 (Reuters) - Chicago corn and soybean
futures posted a dismal close on Monday, as hopes of Chinese
buying fizzled and forecasts of cooler weather in the U.S.
Midwest eased concerns about crop yield losses.
Wheat prices also were lower, pressured by bigger European
yields, traders said.
Chicago Board Of Trade (CBOT) September corn futures
settled down 8-1/2 cents, or 2% at $4.22-1/4 a bushel after
gaining 1.4% in the previous session.
Temperatures are beginning to cool across much of the Corn
Belt after storms and extreme heat over the weekend threatened
to curb U.S. corn yields, according to Commodity Weather Group
on Monday.
But even if high temperatures return, the impact on
pollination may not have been too severe, said Karl Setzer with
Agrivisor. "The reason is the seed genetics are so much better
than they were in the past," he said.
Large speculators raised their net long position in CBOT
corn futures in the week to July 16, regulatory data released on
Friday showed.
The U.S. Department of Agriculture released its weekly crop
progress report and the results were mostly in line with a
Reuters poll released earlier on Monday.
Corn was the exception: USDA said corn in good to excellent
condition is at 57%, down one percentage point from last week
and below analyst expectations.
Soybeans and spring wheat crop progress results were
unchanged in the report, holding firm at 54% and 76%
respectively.

SOYBEANS SLIP
The CBOT August soybean contract settled down 13-1/4
cents, or 1.5% at $8.88-1/4 a bushel in Monday's trading.
Dealers said uncertainty about ongoing trade tensions
between the United States and China continued to weigh on
prices.
"The market has been hinged on the idea that China may
announce the purchase of soybeans," said Mike Zuzolo, of Global
Commodity Analytics. "Soybeans started tumbling when the
announcement never came."
U.S. President Donald Trump said on Friday that U.S.
Treasury Secretary Steve Mnuchin had a very good talk with his
Chinese counterpart, amid signals from China that officials
could soon meet face-to-face in their bid to end a yearlong
trade war.
But Setzer said that in the eyes of grain traders, China
buying soybeans has been more "rumor than fact" at this point.
CBOT September wheat contract settled down 15-1/4
cents, or 2.9% to $4.87-1/4 a bushel on Monday.
The European Union is set for a larger wheat harvest this
summer. A heat-wave in late June wilted some crops but had a
less severe impact than initially feared, traders and industry
officials said on Friday.
The wheat market is facing pressure as rapidly advancing
harvest across the northern hemisphere boosts global supplies.

(Reporting by Barbara Smith in Chicago; additional reporting by
Naveen Thukral in Singapore; editing by Dan Grebler and Tom
Brown)


First Published: 2019-07-22 03:13:18
Updated 2019-07-22 23:52:51


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