GRAINS-Corn and soy climb on bargain buying, positioning ahead of holiday weekend

By Karl Plume

CHICAGO, July 2 (Reuters) - U.S. grain and soybean futures rose on Wednesday in a bargain-buying and technical advance after recent declines and ahead of the Independence Day holiday weekend, with U.S. markets closed on Friday.

Soybeans climbed 2% as soyoil values registered strong gains for a second session on favorable biofuel feedstock policy in the latest version of the U.S. budget bill.

Widespread market rumors that U.S. President Donald Trump will report progress on a trade pact with China while visiting farm-heavy Iowa on Thursday propelled gains, analysts said. Reuters could not immediately confirm the market rumors.

Corn and wheat each added nearly 3%, drawing spillover support from rising soybeans.

"It is a new month and new quarter, so we're seeing a little bit of bottom-picking in these markets. However, U.S. weather looks fantastic," said Terry Reilly, senior agricultural strategist at Marex.

Largely favorable crop development weather dragged corn and soybean prices to multi-month lows in recent sessions as warm temperatures and timely rains boosted U.S. harvest prospects.

The optimal conditions coincide with harvesting by rival exporter Brazil of what some analysts expect to be a record second-corn crop.

Chicago Board of Trade August soybeans SQ25 settled up 23-3/4 cents at $10.53-1/2 a bushel while new-crop November futures SX25 added 20-3/4 cents to $10.48. Buying accelerated as the contracts broke through overhead technical resistance at their 100- and 200-day averages.

September corn CU25 rose 12 cents to $4.18 a bushel while new-crop December CZ25 jumped 11-1/2 cents to $4.33-1/2.

CBOT September wheat WU25 ended up 15 cents at $5.64 a bushel as investors covered more of their large short positions in the market.

Abundant supplies were still hanging over the wheat market, with U.S. farmers progressing with their harvest while crops in Europe and the Black Sea region are expected to be sizeable despite harsh weather including a heatwave in western Europe this week.