Corrects paragraph 3, to clarify sale is of 285,775 tons of corn to Mexico, not soybeans

By P.J. Huffstutter

CHICAGO, June 18 (Reuters) - Chicago Board of Trade soybean futures turned lower on Thursday, after reaching a two-week peak in the previous session, as a stronger dollar and weaker oil prices curbed a rally driven by talk of Chinese demand.

Wheat and corn also dropped as a rebound in grain markets from multi-month lows lost steam, and traders looked to adjust positions ahead of the three-day U.S. holiday weekend.

A spate of U.S. export news on Thursday morning helped keep a bit of a floor under prices, traders said. Exporters sold 132,000 metric tons of U.S. soybeans to China, another 120,000 tons of beans to unknown destinations, and 285,775 tons of corn to Mexico, the U.S. Department of Agriculture said in its daily reporting system. All are for delivery in the 2026/27 marketing year, USDA reported.

The pace of Chinese soybean buying is still slower than hoped for by many market traders, who worry that China may not buy the volume of soybeans this year that USDA has reported in its forecasts. But it's not surprising that China had returned to the U.S. market as prices have dropped.

"They're value-based buyers," said Chuck Shelby, a market analyst and broker at Zaner Ag Hedge. "With the break in prices, it makes sense that they would be looking to get more for their money."

Going into next week, traders are expected to be looking at updates from USDA crop condition reports for signs of stress in the Midwestern corn and soybean crop, Shelby said. Recent heavy rainfall across eastern Iowa, central Illinois and Indiana, and parts of Ohio have left farmers unable to spray or apply their fertilizer nitrogens, and the excess water can be damaging to plant health.

"When you start looking at total rainfalls in these areas for the month of June, you're going to see that there's been an excessive amount," Shelby said. "So I would anticipate crop rating conditions to start falling."

The most-active soybean contract Sv1 on the Chicago Board of Trade was down 0.63% at $11.42 a bushel at 11:54 a.m. CDT (1654 GMT). The benchmark hit a two-week high on Wednesday as it recovered from a four-month low on Monday.

CBOT wheat Wv1 was down 1.69% to $6.10-3/4 a bushel, while CBOT corn Cv1 lost 1.13% to $4.16-1/4 a bushel after touching a one-week high.

Chicago markets will be closed on Friday for the Juneteenth holiday.

The dollar index =USD rose to a one-year high after a Federal Reserve policy meeting reinforced expectations for U.S. interest rate hikes this year. A stronger dollar makes U.S. commodities dearer for overseas buyers. FRX/

Crude oil fell to its lowest since the start of the Iran war as an interim deal to end the conflict and reopen the Strait of Hormuz boosted the global supply outlook. O/R

Meanwhile, a rise in Russian attacks on Ukrainian seaports and vessels could cut monthly grain shipments by as much as a third and has left terminal operators facing mounting losses they say they cannot cover alone, officials and industry executives said.