June 8, 2020 / 10:28 PM / a month ago

GRAINS-Soybeans fall in correction after 2-month high on strong demand

* Soybeans correct after week of strong export sales to China

* Corn strengthens on Ethanol revival

* Wheat trims as harvest mounts (Updates closing prices)

By Christopher Walljasper

CHICAGO, June 8 (Reuters) - Chicago soybean futures closed lower on Monday on technical selling, after reaching a two-month high, following a week of strong export sales.

Corn gained as higher oil prices boosted hopes for ethanol demand and concerns loomed over mounting dryness in parts of the Midwest.

Wheat slipped as harvests in Texas and Oklahoma continued, while rains in the Northern Great Plains bolstered flagging crops across the Dakotas.

The most-active soybean contract on the Chicago Board Of Trade (CBOT) ended down 3 cents at $8.64-3/4 a bushel. It hit $8.73-1/2 a bushel on Friday, the highest since April 1.

Corn rose 2-1/2 cents to $3.33-3/4 a bushel, while wheat fell 2-3/4 cents to $5.11-1/2 a bushel.

CBOT soybeans remained near two-month highs after U.S. exporters reported soybean sales for four straight days last week in deals widely thought to be bound for China.

“I’m going to say this is a correction, following a pretty sizeable run-up,” said Joe Vaclavik, president of Standard Grain. “I don’t know that there’s anything fundamentally that’s led to this sell-off today.”

The U.S. Department of Agriculture on Friday reported 588,000 tonnes of soybean sales.

Corn rose on increased demand. Ethanol production is rising as the U.S. economy reopens, while farmers remain hesitant to sell.

Large speculators increased their net short position in CBOT corn futures in the week ended June 2, regulatory data released on Friday showed.

“You may have some selling, and at least bull spreading the corn market,” said Mark Schultz, chief analyst at Northstar Commodity.

Harvesting in the U.S. Southern plains added to pressure on wheat. But it was supported by news that parts of Russia could see the wheat crop fall by 40% compared with last year due to cold weather and drought. (Reporting by Christopher Walljasper; additional reporting by Naveen Thukral; Editing by Tom Brown and Richard Chang)

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