PARIS/SINGAPORE: Chicago soybeans extended gains on Wednesday as lower than expected crop ratings raised doubts about US harvest yields while expectations China will resume large-scale imports of US soybeans tempered worries about trade tensions.
Wheat resumed a recent rally as the prospect of weather damage in major exporting zones such as Europe and Australia kept supply concerns in focus.
Corn was also firm as weather problems in the wheat market raised the prospect that livestock producers could turn more to corn in feed rations.
The most-active soybean contract on the Chicago Board Of Trade was up 0.4 percent at $9.09-1/4 a bushel by 1134 GMT, after earlier touching a one-week high at $9.12-3/4.
CBOT wheat was up 0.7 percent at $5.72-1/4 a bushel, to stay near three-year highs struck in the past week.
Corn added 0.5 percent to $3.86-1/2 a bushel.
The soybean market was unsettled by a steeper than expected drop in weekly US crop ratings as reported by the US Department of Agriculture (USDA) on Monday, cooling expectations so far this season of bumper yields.
The surprise decline in soybean conditions comes as the crop enters the crucial August period for pod-filling and has sharpened interest in monthly USDA crop forecasts to be published on Friday.
"People are looking towards Friday's report to see what the USDA will do with the soy yield," Michael Magdovitz, commodity analyst at Rabobank, said.
"If yields are below expectations that will help temper expectations about stocks in relation to China demand."
The USDA last month increased its outlook for US soybean stocks to factor in a projected drop in exports to China, after Beijing imposed tariffs on US
beans in a trade standoff with Washington.
Tensions with China, the world's biggest soybean importer, have dampened soybean prices in recent weeks, but analysts say US shipments could revive later in the year after China draws down available supplies in top exporter
Brazil.
Oilseeds analysts Oil World said on Tuesday China may resume large-scale imports of US beans in the fourth quarter despite the dispute.
Analysts also expect indirect trade with China as Argentina imports US soybeans for crushing into soymeal.
The wheat market has been underpinned by dryness eroding harvest prospects in Europe, Russia and Australia.
The weather troubles around the world have raised the prospect of additional demand for US wheat, encouraging price strength in Chicago.
Saudi Arabia, has removed Canada from its list of wheat and barley origins accepted in its import tenders amid a diplomatic spat, although traders stressed there were limited Canadian grain exports to the country.
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