GRAINS-Soybeans drop on lack of Chinese demand, wheat hits contract lows

By Heather Schlitz

CHICAGO, Sept 22 (Reuters) - Chicago soybeans fell to a six-week low on Monday, as a phone call last week between U.S. President Donald Trump and Chinese President Xi Jinping provided no signs of progress on negotiations over agricultural exports, analysts said.

Wheat fell on expectations of plentiful global supplies. Corn also dipped as dealers awaited the report on U.S. harvest progress from the U.S. Department of Agriculture due later in the day and on increased competition from Argentine producers.

Chicago Board of Trade most-active soybeans Sv1 settled 14-1/2 cents lower at $10.11 per bushel.

Wheat Wv1 settled 11-3/4 cents lower at $5.10-3/4 per bushel, and corn Cv1 settled 2-1/4 cents lower at $4.21-3/4 per bushel.

Soybeans rose last week on hopes that the Trump-Xi phone call could help restart the soybean trade between the two countries, but the call brought no news about U.S.-China trade in farm commodities.

"We're all paring back our expectations of exports to China," said Dan Basse, president of AgResource.

China, the world's largest soy importer, has stopped buying U.S. soybeans, instead turning to South American supplies.

"If we don't have China in that demand slot, we have a very narrow window before Brazilians export their supply in January," Basse said.

News that Argentina will remove export taxes on all grains until October 31 has pressured Chicago corn and soy futures, as the measure will boost the competitiveness of Argentina's corn and soy exports.

U.S. corn harvesting is in its early stages, and dealers are monitoring early yield reports to gauge the impact of crop diseases and late-summer dryness that could prompt the USDA to lower its production estimates next month.

Wheat is also being weighed down by improving harvest prospects in Australia and globally.