July 6, 2018 / 7:42 AM / a year ago

GRAINS-Soybeans tick up after hitting contract-low on U.S.-China trade war

    * Wheat eases after 2-session rally on global supply woes

 (Adds China markets, updates prices)
    By Naveen Thukral
    SINGAPORE, July 6 (Reuters) - U.S. new-crop soybean prices
ticked higher on Friday after dropping to a contract-low earlier
in the session as the trade war between the United States and
top importer China escalated.
    Wheat slid after two sessions of strong gains driven by
concerns over adverse weather.
    Chicago Board of Trade November soybeans hit a
contract-low at $8.53 a bushel and the market was up 0.2 percent
at $8.57-3/4 a bushel by 0718 GMT. The most-active contract
 hit a 10-year low of $8.42 a bushel last month.
    Wheat dipped 0.2 percent to $5.04-1/2 a bushel after
rising 5.3 percent in the last two sessions, while corn
gave up 0.3 percent to $3.63-1/2 a bushel.
    "The soybean market has largely factored in Chinese tariffs.
We expect Brazilian soybeans premium to rise further when the
tariffs start," said one India-based agricultural commodities
    U.S. tariffs on $34 billion in Chinese imports took effect
as a deadline passed on Friday, and with Beijing having vowed to
respond immediately in kind, the world's two biggest economies
took a high-stakes turn towards all-out trade conflict.

    China is expected to raise tariffs on U.S. soybeans to a
level that is expected to curb Chinese demand for U.S.
    China's soymeal futures fell more than 2 percent on Friday
afternoon before erasing most of the losses, amid market
confusion over whether China had implemented its tariffs on
soybeans and other goods from the United States.
    The January soymeal contract on the Dalian Commodity
Exchange fell to a low of 3,090 yuan a tonne before closing down
0.6 percent at 3,162 yuan a tonne.
    Brazil, the world's largest soybean exporter, may have to
import the oilseed from the United States this year to satisfy
demand from local processors, an executive of exporters
association Anec said on Thursday.
    If China's demand for Brazilian soy rises due to the trade
war with the United States, local processors may have to resort
to importing 500,000 to 1 million tonnes from the United States,
Luis Barbieri said at an event in Sao Paulo. 
    Private analytics firm Informa Economics revised upward its
forecast for the U.S. 2018 corn yield to 176.0 bushels per acre
(bpa), from 174.5 bpa previously, and raised its U.S. soybean
yield forecast to 49.8 bpa from 49.5 bpa, the firm said on
Thursday in a client note seen by Reuters.
    Wheat futures have rallied sharply in the last two sessions
on worries about smaller harvests from major exporters.
    The European Union may harvest almost 6 million tonnes less
wheat this year after hot and dry weather damaged some crops, a
Reuters poll showed.
    Commodity funds were net buyers of CBOT wheat and corn
futures contracts on Thursday and net sellers of soybeans,
soymeal and soyoil, traders said.
    Trader estimates of fund activity in corn ranged from
selling a net 6,000 contracts to buying a net 5,000 contracts.

 Grains prices at  0718 GMT
 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  504.50  -1.00   -0.20%   +2.75%       516.29  58
 CBOT corn   363.50  -1.00   -0.27%   -0.21%       389.23  33
 CBOT soy    857.75  2.00    +0.23%   -0.75%       953.46  9
 CBOT rice   11.91   $0.05   +0.42%   +2.45%       $11.66  55
 WTI crude   73.06   $0.12   +0.16%   -1.46%       $68.28  67
 Euro/dlr    $1.171  $0.002  +0.16%   +0.46%               
 USD/AUD     0.7407  0.002   +0.28%   +0.37%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential
 (Reporting by Naveen Thukral
Editing by Sunil Nair and Subhranshu Sahu)
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