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Grains-corn prices dip on U.S. crop condition

Chicago corn futures fell on Tuesday after a report from the U.S. Department of Agriculture (USDA) gave a reassuring picture of the U.S. crop’s condition, with wheat prices also falling while soybeans firmed.

Wheat faced pressure from the advancing U.S. harvest while soybeans are drifting as the fallout from the China trade dispute is assessed and ahead of the USDA world supply and demand forecasts on Aug. 12.

The Chicago Board of Trade’s most-active corn contract was down 0.7% at $4.11-3/4 a bushel by 1105 GMT.

Wheat fell 0.7% to $4.91 a bushel and soybeans rose 0.1% to $8.70 a bushel.

The USDA’s weekly crop report late on Monday said that 57% of U.S. corn was in good-to-excellent condition, matching analyst expectations but below the 71% at this time last year.

“Corn is weaker today after the USDA gave a reasonable picture of the U.S. crop with no unpleasant surprises,” said Matt Ammermann, commodity risk manager with INTL FCStone.

The USDA said 73% of the U.S. spring wheat crop is in good-to-excellent condition, above analyst forecasts of 72%. It said the U.S. winter wheat harvest was 82% complete, up from 75% last week but below analyst forecasts of 84%.

“The U.S. winter wheat harvest is being gathered at a good pace and there is currently no need for concern,” Ammermann said. “U.S. new-crop wheat is also arriving on a world market with plentiful supplies.

“Egypt is holding a wheat purchase tender on Tuesday and this could also remind the market there is a lot of cheap competition to the U.S., especially from the Black Sea region.”

The soybean market faces continued headwinds from renewed trade tensions between the United States and China.

China’s Commerce Ministry on Tuesday said that Chinese companies have stopped buying U.S. agricultural products and it will not rule out potential import tariffs on U.S. farm products.

“China is considering imposing further tariffs on U.S. agricultural products bought after Aug. 3,” Commerzbank said in a note. “After state companies were already instructed not to buy any more U.S. agriculturals, private companies have also stopped ordering U.S. soybeans.”

But some in the market were not expecting more Chinese purchases anyway.

It is clear U.S. markets want their China demand back, but there is frustration that few of China’s former promises to buy have been delivered upon, Ammermann said. (Reporting by Michael Hogan Additional reporting by Naveen Thukral Editing by David Goodman)

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