July 28, 2020 / 5:10 AM / 14 days ago

GRAINS-Soybeans drop 1.5% to hit 12-day low on favourable U.S. weather

* USDA says 72% of corn and soybeans in good-to-excellent shape

* USDA confirms more U.S. exports

* Production prospects in Russia rise

By Colin Packham

SYDNEY, July 28 (Reuters) - U.S. soybean futures fell as much as 1.5% on Tuesday to hit a 12-day low after the U.S. Department of Agriculture said the condition of crops were well ahead of market estimates, reinforcing expectations for a sizable U.S. harvest.

Corn fell nearly 1% as favourable U.S. weather conditions were seen boosting prospects for the crop, while wheat slipped 0.5%.

The most active soybean futures on the Chicago Board Of Trade were down 1.3% at $8.92 a bushel by 0437 GMT, having earlier hit $8.86-3/4 a bushel - the lowest since July 16.

The USDA crop condition report was driving losses, traders said.

“The USDA report caught the market off-guard. The report shows that concerns about U.S. crops are overdone,” said a Melbourne-based grains trader, who requested anonymity as he is not authorised to speak with the media.

The USDA on Monday rated 72% of both corn and soybeans as good-to-excellent condition, better than the average of estimates in a Reuters survey of 10 analysts that had the crops holding steady at 69% in the past week.

However, continued strong demand for U.S. exports limited losses.

The USDA on Monday confirmed U.S. soybean export sales to China, along with shipments to Mexico. It was the 10th straight day that the USDA announced soybean sales to either China or unknown destinations, which is often believed to be China.

The most active corn futures were down 0.9% at $3.31-1/2 a bushel, having lost 0.1% in the previous session.

The most active wheat futures slipped 0.4% at $5.25-3/4 a bushel, after closing 2.2% lower on Monday.

Moscow-based consultancy IKAR raised its Russian wheat crop forecast on Monday due to high yields in some regions. (Reporting by Colin Packham, Editing by Sherry Jacob-Phillips)

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