Chicago corn futures turned lower on Wednesday as traders began to unwind the corn-wheat spread, while soyabeans were boosted by hopes trade talks between the United States and China can be revived.
Corn contracts rallied early in the day on short covering, as the market weighed whether further hot weather in the US Midwest could affect crop yields this fall, traders said.
Very hot and dry weather could return to the US Midwest in the next two weeks, particularly in parts of top-corn producing states Illinois, Iowa and Indiana, according to a report by Commodity Weather Group on Wednesday.
The rally in corn contracts fizzled as news of variable quality findings in north central North Dakota emerged from the Wheat Quality Council's tour.
That, in turn, convinced dealers to short wheat and go long on corn, said Mike Zuzolo of Global Commodity Analytics.
CBOT's most active corn contract settled down 3/4 of a cent at $4.30-3/4 per bushel.
The most active CBOT wheat contract settled up 10-1/2 cents at $4.97-3/4 a bushel, as the market found support after dipping to a low of $4.83-1/4 on Tuesday, its weakest since May 30.
Meanwhile, soyabean futures continued to see a bullish bump from fund buying, driven largely by hopes on-again, off-again US-China trade talks might be resuming.
The most-active soyabean contract on CBOT closed up 4-1/2 cents, at $9.08-1/4 a bushel.
Top US and Chinese negotiators will meet face-to-face next week for the first time since the countries' leaders agreed in June to revive talks aimed at ending a year-long trade war between the world's two largest economies.
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