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GRAINS-Corn, soy drop as crop outlook weighed; wheat stays weak

Barbara Smith

* Market weighs Midwest weather, awaits USDA Aug. 12 data

* Showers could help Midwest crops but rain coverage unclear

* Weak Chinese demand hangs over U.S. soybean market

* Wheat ticks down as big supplies, steady dollar weigh (Updates prices, adds quotes, changes byline and dateline from PARIS/SYDNEY to CHICAGO)

CHICAGO, Aug 7 (Reuters) - U.S. corn and soybean futures dipped on Wednesday as traders assessed rain forecasts for the U.S. Midwest after a recent dry spell, while looking ahead to a government report expected to revise acreage estimates following rain-hit planting in spring.

Wheat ticked lower to extend losses from Tuesday's technical slide, with Northern Hemisphere harvests and a steady dollar helping keep a lid on prices.

Grain futures markets "are basically responding to the macros of the day, with the currencies weak against the dollar and the stock market down," said Charlie Sernatinger, global head of grain futures at ED&F Man Capital.

The return of rain this week weighed on corn prices on Tuesday, with some weather models showing needed moisture for developing crops. But the forecasts were inconsistent about how much precipitation would fall in the week ahead.

"Everybody knows that there is a big problem out there as far as the weather is concerned, that the crops are going backwards and they're well below trend-line yields. But the perception is that we're losing demand faster than we're losing supply," Sernatinger said.

Trading was hesitant as investors looked ahead to Monday's U.S. Department of Agriculture (USDA) monthly supply and demand report.

The publication is anticipated for its updated corn and soybean planting estimates, amid widely differing market assessments of this year's acreage.

The most active corn futures on the Chicago Board Of Trade were down 1-1/4 cents, or 0.3%, at $4.11-1/2 a bushel, at 11:03 a.m. CDT (1603 GMT) on Wednesday, having ended slightly lower in the previous session.

The most active CBOT soybean futures were down 3-1/2 cents, or 0.4%, at $8.62-3/4 a bushel, having closed marginally lower on Tuesday.

The risk of prolonged weakness in Chinese demand for U.S. supplies was also hanging over the soybean market.

China has halted purchases of U.S. agricultural goods in a deepening trade war with Washington, while overall Chinese demand for soybeans is set to be cut by a swine disease that has decimated the world's biggest pig herd.

CBOT wheat was down 3-1/4 cents, or 0.7%, at $4.80-3/4 a bushel, as it struggled to recover from a 2% slide on Tuesday.

Abundant global supplies of wheat remained an obstacle for U.S. export prospects, while a firm dollar has also made U.S. supplies less competitive.

No U.S. wheat was offered in a tender held by Egypt on Tuesday, in which the world's top wheat importer purchased 415,000 tonnes of Russian, Romanian and Ukrainian crop. (Reporting by Barbara Smith in Chicago Additional reporting by Karl Plume in Chicago, Gus Trompiz in Paris and Colin Packham in Sydney Editing by David Holmes, P.J. Huffstutter and Jonathan Oatis)