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Wheat retreats from 10-month high; trade row weighs on corn, soy

U.S. wheat futures fell more than 1 percent on Wednesday to retreat from their highest in over 10 months touched the session before, with investors locking in gains after worries over dry weather in key growing regions stoked a rally.

Corn and soy prices also edged lower, extending overnight losses amid renewed trade tensions between China and the United States.

A stronger dollar weighed on prices as a deepening political crisis in Italy kept the euro near a 10-month low against the greenback.

The most-active wheat contract on the Chicago Board of Trade was down 1.3 percent at $5.29-1/2 a bushel by 0650 GMT, after peaking at $5.54 on Tuesday, its strongest since July last year.

“The market perhaps found some more producers selling at season highs on the day,” Commonwealth Bank of Australia analyst Tobin Gorey said in a note, referring to Tuesday’s rally, which was spurred by worries about dryness in wheat-producing regions from the Black Sea to the United States and Australia.

“Some fundamental investors might have also have taken the opportunity to realise some profits on a long position.”

Corn slipped 0.9 percent to $3.96-1/2 a bushel and soybeans dropped 0.5 percent to $10.25-1/4.

The United States said it still holds the threat of imposing tariffs on $50 billion of imports from China and will use it unless Beijing addresses the issue of theft of American intellectual property.

China is the world’s biggest soybean importer and the top buyer of U.S. sorghum, a feed grain that competes with corn.

Chinese state media criticised the U.S. announcement, saying that Beijing was ready to fight back if Washington was looking to reignite a trade war.

State news agency Xinhua said China hoped that the United States would not act impulsively but stood ready to fight to protect its own interests.

Meanwhile, Chinese grain merchants seeking to resume purchases of U.S. sorghum after an anti-dumping probe by Beijing that had halted trade between the world’s biggest buyer and seller of the grain are now finding supplies tight.
Source: Reuters (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford and Richard Pullin)

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