July 23, 2020 / 3:36 AM / 21 days ago

GRAINS-Soybeans ease as U.S.-China tensions fuel demand concerns

* Escalating U.S.-China tensions raise worries over demand

* Wheat falls after two days of gains, harvest pressure weighs (Adds details on fund buying, quotes in paragraphs 3-4)

By Naveen Thukral

SINGAPORE, July 23 (Reuters) - Chicago soybeans slid on Thursday as mounting diplomatic tensions between Beijing and Washington stoked fears over China’s demand for U.S. supplies.

Wheat fell after two days of gains amid harvest pressure while corn lost ground.

“I think there is just too much uncertainty between the U.S. and China relations,” said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.

“China is likely just stocking up before turning up the heat.”

The most-active soybean contract on the Chicago Board Of Trade (CBOT) fell 0.2% to $8.94 a bushel by 0309 GMT, corn slipped 0.3% to $3.33-3/4 a bushel and wheat dropped 0.4% to $5.32-1/4 a bushel.

Washington has given Beijing 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations between the world’s two biggest economies.

China, by far the world’s biggest soybean importer, has stepped up purchases of U.S. farm products in recent weeks.

Private exporters reported the sale of 453,000 tonnes of soybeans to China and 211,300 tonnes to unknown destinations, the U.S. Department of Agriculture (USDA) said.

Additionally, there were export sales of 262,000 tonnes to China received in the reporting period, USDA said.

The Port of Paranagu√°, Brazil’s second busiest for soybean and sugar cargoes, is gradually resuming grain export operations after a fire that affected conveyor belts at two terminals, according to a statement from the port authority on Wednesday.

Commodity funds were net buyers of CBOT corn, wheat, soybeans and soymeal futures contracts on Wednesday and net sellers of soyoil futures, traders said. (Reporting by Naveen Thukral; Editing by Vinay Dwivedi)

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