* China currency shift will raise its buying power
* Leading commodity buyer also now seeing crop worries
* Global weather patterns sour, underpinning prices
By Sam Nelson and Christine Stebbins
CHICAGO, June 20 China's surprising move over
the weekend signaling a new willingness to let its currency
gain strength may give grain prices an initial boost this week,
but recent adverse weather for world crops will be more
"I, and a few other commercials, see the news as mildly
supportive. More important may be how the external commodity
markets react to the news," said Dan Basse, president of grain
and livestock industry consultant AgResource in Chicago.
"Chinese and U.S. weather is much more important to grain
price direction in the week ahead," he said.
In what was seen as a largely political move to deflect
criticism of its fixed exchange rate ahead of the G20 meeting
this week, China's central bank on Saturday indicated it was
ready to break a hard peg with the dollar that has come under
intense criticism from the United States and other countries.
"This sounds more serious than previous rhetoric coming out
of Beijing, but it would be wise to initially take the news
with a grain of salt," said Bill Lapp, an economist with
Advanced Economic Solutions in Omaha, Nebraska.
"The exchange rate flexibility is presumably an effort to
tame inflation, which we have already observed in their recent
purchases of US corn. In other words, a stronger yuan benefits
U.S. ag exports. But we have already seen some benefit.
"Not sure what this does for prices Sunday night, but would
think weather is still the first factor to watch," Lapp said.
Chicago Board of Trade wheat and corn futures rallied to
three-week highs on Friday and soybeans traded around a
one-month peak because of the turn to adverse crop weather.
So analysts say there could be follow-through strength in
the markets this week if harsh weather patterns persist.