* Soy turns lower after rally on rating fall, hot weather
* Focus on soy, corn yield revisions in Friday USDA report
* Wheat eases after recent surge on global weather damage (Adds closing prices)
By Karl Plume
CHICAGO, Aug 9 (Reuters) - U.S. soybean futures retreated on Thursday after two sessions of gains in a profit-taking and position-squaring setback ahead of Friday’s U.S. Department of Agriculture monthly supply and demand report.
Corn also slipped as traders moved to the sidelines ahead of the closely watched report, the first of the season to include field surveys of U.S. crops that have been hurt in some areas by hot, dry weather.
Wheat fell as prices consolidated after recent multi-year highs linked to weather damage to crops in key export zones like Europe, Russia and Australia.
“We’re seeing consolidation ahead of the report,” said Terry Reilly, senior commodities analyst with Futures International. “Traditionally, the August report tends to yield some wide price swings.”
“With how well soybeans and wheat have been performing lately, there is profit taking setting into this market with longs getting out,” he said.
Chicago Board of Trade November soybeans fell 6-1/2 cents to $9.04 a bushel, while December corn shed 2-1/4 cents to $3.82-3/4 a bushel.
CBOT September soft red winter wheat fell 5-1/2 cents to $5.64-1/2 a bushel, shrugging off support from another EU wheat harvest downgrade by analyst firm Strategie Grains.
Analysts expect the USDA to increase its estimates of corn and soybean yields and production, but the latest weather outlook has tempered expectations.
After rains across the Midwest this week, parts of the region are expected to turn drier over the next two weeks at a critical stage of development for corn and soybean crops, forecasters said.
“Model consensus (is) growing over building heat and dryness in the U.S. Upper Midwest where corn is in relatively early grain fill stages and beans are filling pods,” Thomson Reuters Agriculture Research analysts said in a note.
A slowdown in Chinese imports of U.S. soybeans after Beijing imposed extra tariffs has hung over the market, although expectations that China will need to resume buying U.S. soybeans have lent support at times this week.
A second day of strong gains in soy prices on China’s Dalian Commodity Exchange limited declines in CBOT soybeans.
The USDA on Thursday reported net U.S. soybean export sales near the high end of trade estimates, with atypical buyers such as the Netherlands, Spain, Egypt and Pakistan booking large purchases. China, the world’s top importer, canceled purchases in the week.
Corn and wheat export sales were in line with trade estimates. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; editing by Alistair Bell and James Dalgleish)