GRAINS-CBOT wheat futures dip; corn down on friendly weather, spread-trading

By P.J. Huffstutter

CHICAGO, July 23 (Reuters) - Chicago Board of Trade wheat futures fell on Wednesday amid signs of profit-taking, while Minneapolis spring wheat futures faced pressure from news of hefty potential yields in North Dakota, market analysts said.

Crop scouts on the first day of an annual three-day tour of North Dakota's hard red spring wheat crop projected above-average yields in the southern part of the top-producing state following plentiful rains this summer, although the yields fell short of a record set last year. The report came out late on Tuesday.

Wheat's price slump was somewhat limited by inter-market spread trading, market analysts said. Fund traders, who have significant net short positions in corn, have been opting to sell corn and buy either wheat or feeder cattle futures instead, said Mike Zuzolo, president of Global Commodity Analytics.

"They've been in this mindset, where corn remains on the short-side of the trade," Zuzolo said.

That perspective likely will not change until the U.S. Department of Agriculture releases its World Agricultural Supply and Demand Estimates report on August 12, which the market will be watching for revised corn and soybean yield estimates, Zuzolo said.

The most active wheat contract on the Chicago Board of Trade Wv1 was down 7-1/2 cents at $5.42 a bushel by 1701 GMT. CBOT soybeans Sv1 rose 3-1/4 cents to $10.28-3/4 a bushel and corn Cv1 was down 1/2-cent at $4.17-3/4 a bushel.

Corn futures tried to claw back Tuesday's losses early in the session, but slumped by mid-afternoon as forecasts for crop-friendly rain in U.S. grain belts and plentiful supply weighed on prices and prompted some traders to reassess their forecast models.

Several traders said they are paying attention to corn farmers reporting pollination problems in their fields and variability in this year's crop. But it remains uncertain how widespread such production issues might actually be, they said.

Soybean futures climbed on weakness in the U.S. dollar and hopes that trade deals may boost demand for U.S. exports. .DXY

A U.S.-Japan trade deal and U.S.-China talks next week are adding to hopes that President Donald Trump will get foreign buyers to step up U.S. farm goods purchases.