REFILE-GRAINS-Wheat up 1 percent as China buys U.S., Australian wheat

(Refiles to correct transmission error, no change in text or
    * U.S. wheat up for second day
    * Egypt conflict capping wheat gains
    * Markets oversold, due for bounce
    * U.S. market holiday July 4

    By Sam Nelson
    CHICAGO, July 3 (Reuters) - U.S. wheat rose over 1 percent
on Wednesday on reports that China has bought large quantities
of wheat from Australia and the United States.
    Wheat also traded higher on a bargain buying spree after a
one year low hit earlier in the week.
    Soybeans advanced for the eighth day in a row on tight
stocks of soybeans while the corn market turned choppy and mixed with crop friendly weather in the U.S. restraining gains in both the corn and soy futures markets. Traders and analysts were skeptical that the wheat market would trace a steady line upward due to the plentiful global stockpile of wheat and escalating tensions and demonstrations in Egypt, the largest global wheat buyer. "The sale of wheat to China is supportive but I'm concerned about what's going on in Egypt, the world's largest buyer. What's happening right now in Egypt isn't bullish," said Sterling Smith, market specialist for Citigroup. Market participants eyed the turmoil in Egypt which has erupted over President Mohamed Mursi's policies. Nevertheless, wheat futures prices held onto gains Wednesday following the news that China bought 300,000 tonnes of wheat from Australia and 360,000 tonnes from the United States. At 10:00 a.m. CDT (1500 GMT), Chicago Board of Trade July wheat was up 6-1/4 cents per bushel at $6.55-3/4, July corn was up 1-1/4 at $6.74 and July soybeans were up 13 at $15.86. FOCUS ON BARGAIN HUNTING U.S. corn rose for a second session as bargain hunting and strong oil prices led to a rebound from its lowest level in
two-and-half years earlier this week on expectations of record production. New-crop soybeans rose after four sessions of declines. In other markets, oil prices surged on a sharp decline in crude stockpiles in top consumer the United States and political unrest in Egypt, which could lead to supply disruptions. "We have seen a bit of an improved tone come through pricing after bearishness over the past few days. It is just positioning by traders," said Luke Mathews, a commodities strategist at Commonwealth Bank of Australia. "We are still looking at a scenario of very large crops in 2013/14, and that is likely to replenish the tight old crop situation." U.S. corn and soybean crops have improved in the past week, aided by warmer weather, although heavy storms damaged crops in parts of the northern Midwest, the U.S. Department of Agriculture and state reports said. MARKET POSTURING AHEAD OF HOLIDAY "Markets had gotten oversold. We've taken about a dollar out of beans since mid-June and around 75 cents out of corn, so I think there is a fair amount of short-covering before the holiday," Smith said. Markets will close at 12:00 p.m. CDT (1700 GMT) on Wednesday
and will reopen at 8:30 a.m. CDT (1330 GMT) on Friday due to the U.S. Independence Day Holiday on July 4. "There's a little nervousness about hotter weather coming up later in the month. Right now it looks ideal but of course that could change," Smith said. Crop friendly weather continues to dominate the U.S. Midwest corn and soybean growing region with moderate temperatures and occasional rainfall expected into at least mid-July, an agricultural meteorologist said on Wednesday. "Rains will return to the northwestern Corn Belt by the weekend and spread across the west through the middle of next week," said Joel Widenor, meteorologist for Commodity Weather Group. Widenor said the rains would ensure moisture supplies remain adequate and "plenty of moisture also will aid pollinating corn in the south." Hot weather with temperatures in the 90s (degrees Fahrenheit) to 100 F should be limited to the Southern Plains. "This will limit potential impacts on corn to parts of Nebraska and Kansas with very favorable conditions elsewhere," Widenor said. Crop forecaster Lanworth on Wednesday raised its outlook for the 2013/14 U.S. corn and soybean harvests due to an increased probability for normal to cool summer temperatures. Corn production in the United States was seen at 13.9 billion bushels, up from Lanworth's previous estimate of 13.7 billion and soybean production was estimated at 3.36 billion, up from 3.34 billion. Prices at 10:02 a.m. CDT (1502 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 673.50 0.75 0.1% -3.5% CBOT soy 1585.75 12.75 0.8% 11.8% CBOT meal 489.90 2.90 0.6% 16.5% CBOT soyoil 47.10 0.18 0.4% -4.2% CBOT wheat 655.50 6.00 0.9% -15.7% EU wheat 194.50 1.25 0.7% -22.3% US crude 101.97 2.36 2.4% 11.1% Dow Jones 14,941 9 0.1% 14.0% Gold 1256.06 14.67 1.2% -25.0% Euro/dollar 1.2982 0.0005 0.0% -1.6% Dollar Index 83.3450 -0.1990 -0.2% 4.5% Baltic Freight 1133 -37 -3.2% 62.1% (Additional reporting by Sybille de La Hamaide in Paris, Valerie Parent in Paris and Naveen Thukral in Singapore; editing by Sofina Mirza-Reid)

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