June 4, 2020 / 2:40 AM / a month ago

GRAINS-Soybeans near 3-week high on upbeat demand, wheat extends gains

* Chicago soybean futures tick lower, after rising to May 12 high

* Strong demand for U.S. beans supports prices

* Recent weakness in the U.S. dollar likely to support commodities (Adds U.S. currency move, fund activity, quote in paragraphs 3-4)

By Naveen Thukral

SINGAPORE, June 4 (Reuters) - Chicago soybean futures eased on Thursday, though the market hovered near a three-week high with prices supported by strong demand for U.S. cargoes.

Wheat gained for a second session with a softer greenback making U.S. products competitive in the global market.

“The USDA reported more hefty export sales of U.S. soybeans,” said Tobin Gorey, director of agriculture strategy at Commonwealth Bank of Australia.

“The announcement did not state a destination for those beans. But, most would bet that those beans are bound for China.”

The most-active soybean contract on the Chicago Board Of Trade dipped 0.1% to $8.56-1/2 a bushel by 0223 GMT, after rising earlier in the session to match Wednesday’s three-week high of $8.58 a bushel.

Wheat edged up 0.1% to $5.12-1/2 a bushel, having closed 0.8% higher on Wednesday and corn added 0.2% to $3.24-1/2 a bushel, after closing marginally lower in the previous session.

The U.S. Department of Agriculture confirmed sales of 186,000 tonnes of U.S. soybeans to unknown destinations, which analysts said likely meant China.

A spate of U.S. soy sales this week eased concerns about export demand after Beijing reportedly told importers to halt purchases following a dispute over a new Chinese security law for Hong Kong.

The U.S. dollar fell to an 11-week low against a basket of other currencies on Wednesday, on optimism that the worst of the economic downturn stemming from the global spread of the coronavirus is over.

The U.S. Energy Information Administration said production of corn-based ethanol increased by 41,000 barrels per day in the latest week, while ethanol stocks fell.

Commodity funds were net buyers of CBOT soybean, soymeal and wheat futures contracts on Wednesday and net sellers of corn and soyoil futures, traders said. (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)

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