July 10, 2020 / 5:46 PM / a month ago

GRAINS-Corn, soy futures drop on favorable U.S. weather; wheat jumps

* Rain expected in U.S. Corn Belt, analysts say

* Traders shrug off big U.S. corn sale to China

* USDA cuts estimates for U.S. corn, wheat crops (New throughout, adds latest prices, USDA data, Trump comments)

By Tom Polansek

CHICAGO, July 10 (Reuters) - U.S. corn and soybean futures prices fell on Friday as crop weather looked favorable and President Donald Trump said the country’s relationship with trading partner China was severely damaged.

A monthly U.S. Department of Agriculture (USDA) report pegged America’s harvests below analysts’ expectations, although the estimates were not surprising enough to push crop prices higher.

Traders are paying close attention to U.S. weather forecasts because the corn crop is in a key stage for development. Yields are important because the USDA previously estimated that farmers planted fewer acres than analysts expected.

“Without a bullish surprise coming out of this report, we’re back to trading weather forecasts,” said Karl Setzer, commodity risk analyst for AgriVisor.

The most-active Chicago Board of Trade corn futures were down 10-3/4 cents at $3.46-1/4 and reached their lowest price since June 30 by 1735 GMT. Soybean futures fell 11-1/2 cents to $8.90 and set their lowest price since July 1.

Trump’s comments on China added pressure to crop prices by fueling doubts about whether Beijing will fulfill pledges to buy more U.S. farm products, said Brian Hoops, president of Midwest Market Solutions. Tensions have intensified over U.S. criticism of China’s handling of the coronavirus outbreak.

Traders largely shrugged off USDA data on Friday showing that China booked its second-largest single-day U.S. corn purchase on record.

The USDA separately pegged the U.S. 2020/21 corn harvest at 15 billion bushels, below the average analyst estimate of 15.036 billion bushels and down from the government’s June estimate of 15.995 billion.

The USDA estimated all-wheat production at 1.824 billion bushels, below analysts’ estimates for 1.848 billion.

“The surprise of the day has to be the wheat production numbers, which were bullish,” said Charlie Sernatinger, analyst for ED&F Man Capital.

Most-active CBOT wheat futures jumped 10-1/2 cents to $5.35-1/2 a bushel and reached their highest price since April 24.

Reporting by Tom Polansek in Chicago, Gus Trompiz in Paris and Colin Packham in Sydney; Editing by Marguerita Choy and Emelia Sithole-Matarise

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