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GRAINS-Soybeans ease from 7-month high, U.S. dryness limits decline

* Dry weather in parts of U.S. Midwest keeps floor under prices

* Corn falls for 3rd session as crop tour sees higher yields (Adds quote in paragraph 3, details on Argentina’s corn crop, fund positioning)

SINGAPORE, Aug 20 (Reuters) - Chicago soybeans edged lower on Thursday after hitting a seven-month peak in the previous session, although losses were capped by concerns that dry weather could curb U.S. crop yields.

Corn slid for a third straight session, pressured by a crop tour forecast for higher yields in parts of the U.S. Midwest.

“There are pockets of dryness which is a cause of some concern,” said one Singapore-based trader at an international company that ships beans to China. “Overall, U.S. should have a decent crop, so on the supply front there will not be any major issues.”

The most-active soybean contract on the Chicago Board Of Trade lost 0.1% to $9.13-1/2 a bushel by 0307 GMT, after hitting a Jan. 22 high of $9.19-1/2 a bushel on Wednesday.

Corn slid 0.2% to $3.39-1/4 a bushel and wheat was down 0.2% at $5.21 a bushel.

There was additional support for the soybean market stemming from strong Chinese demand.

Exporters reported selling 192,000 tonnes of U.S. soybeans for delivery to China during the 2020/2021 marketing year, the U.S. Department of Agriculture said on Wednesday, after the White House chief of staff said there were no new trade talks scheduled with China.

Crop tour scouts observed strong corn yield prospects in Ohio and South Dakota and above-average crop potential in Nebraska and Indiana, shifting attention back to the potential for a bumper crop.

Still, a clearer picture of the damage to crops in the path of last week’s derecho storm emerged on Wednesday, as crop scouts on an annual tour scrambled across blown over corn stalks and wind-battered soybean fields in Illinois and Iowa.

Argentina’s 2020/21 corn planting area is seen at 6.2 million hectares, below the historic 6.3 million planted in the previous cycle, due to dry weather in key producing areas, the Buenos Aires Grains Exchange said in a report on Wednesday.

Commodity funds were net buyers of CBOT wheat, soybean, soyoil futures contracts on Wednesday and net sellers of corn futures contracts, traders said. Traders reported mixed trade for soymeal, ranging from 1,000 lots of meal sold to 2,500 lots bought. (Reporting by Naveen Thukral; Editing by Aditya Soni)

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