July 7, 2020 / 5:23 AM / a month ago

GRAINS-Soybeans extend gains on dry U.S. weather threat

* Hot dry weather threatens U.S. soybean and corn crops

* USDA reports U.S. soybeans crops in good condition

* Corn firms, wheat falls

By Colin Packham

SYDNEY, July 7 (Reuters) - U.S. soybeans edged higher on Tuesday as traders were worried that adverse weather conditions could threaten yields, pushing prices to a near four-month high, though a widely watched report provided a ceiling to gains.

The most active soybean futures on the Chicago Board Of Trade were up 0.1% at $9.06-3/4 a bushel. Prices hit their highest since March 5 at $9.12-1/2 a bushel in the previous session.

“The are some weather concerns in the United States, while the situation in Brazil could slow soybean processing,” said Phin Ziebell, agribusiness economist, National Australia Bank.

The market also drew support from continued demand from China, traders said.

Corn edged higher, while wheat dropped.

The U.S. Department of Agriculture on Monday reported that exporters struck deals to sell 264,000 tonnes of old-crop U.S. soybeans and 202,000 tonnes of new-crop U.S. corn to China.

Capping some of the grains, however, was a widely watched report by the United States Department of Agriculture that showed the condition of the crops was better than expected.

The agency rated 71% of the U.S. soybean crop in good-to-excellent condition, unchanged from the previous week. Analysts on average had expected a 1 point decline.

The most active wheat futures were down 0.2% at $4.92-1/4 a bushel, having closed 0.2% firmer in the previous session.

The most active corn futures were up 0.1% at $3.47 a bushel, having closed 0.8% higher in the previous session.

The USDA said 71% of the country’s corn crop was in good-to-excellent condition, down 2 percentage points from a week earlier.

Analysts surveyed by Reuters on average had expected a decline of 1 percentage point.

The USDA on Monday reported 182,880 tonnes of U.S. corn were sold to Mexico for shipment in the 2020/21 and 2021/22 marketing years. (Reporting by Colin Packham, Editing by Sherry Jacob-Phillips)

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