* Corn futures firm after dropping 1.4% in last 2 sessions
* Rapid U.S. planting progress, weak demand to weigh on prices (Adds details on oil prices, fund positioning, quote in paragraph 3; updates prices)
By Naveen Thukral
SINGAPORE, May 5 (Reuters) - Chicago corn futures edged higher on Tuesday after two straight sessions of losses, although gains were capped by rapid U.S. planting progress and coronavirus-fuelled demand concerns.
Wheat lost ground as forecasts of rains in parts of Europe boosted crop prospects.
“Oil has risen but strong U.S. planting progress and demand destruction due to the coronavirus will limit any gains,” said Ole Houe, director of advisory services at brokerage IKON Commodities.
Corn often tracks crude oil prices as more than a third of the U.S. corn crop is used to make ethanol which competes with fossil fuels.
Oil prices climbed in early trade, adding to gains in the previous session, on expectations that fuel demand will begin to pick up as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown measures.
The most-active corn contract on the Chicago Board Of Trade corn rose 0.2% to $3.16 a bushel by 0256 GMT.
Wheat dropped 0.8% to $5.15-1/4 a bushel and soybeans added 0.1% to $8.37 a bushel.
The U.S. Department of Agriculture (USDA) said U.S. farmers planted 51% of their intended corn acres as of Sunday, above the average of analyst estimates of 48% in a Reuters poll.
It also said U.S. farmers planted 23% of their intended soybean acreage by Sunday, topping the average soybean estimate in the Reuters poll of 21%. The USDA’s figure was up from 8% a week ago and ahead of the five-year average of 11%.
The COVID-19 pandemic has already dented grain prices by hammering demand for corn-based ethanol biofuel and has threatened to curb consumption of livestock feed after the closure of some meat factories.
U.S. President Donald Trump said on Thursday the Phase 1 trade deal with China was now of secondary importance to the coronavirus outbreak and threatened new tariffs over the pandemic.
Agriculture was a key part of the trade pact signed in January, raising hopes that China, the world’s biggest soybean importer, would ramp up purchases of U.S. supplies.
Brazilian soybean exports in April reached 16.3 million tonnes, an all-time record for a single month and an increase from 9.4 million tonnes in same month last year, according to average daily export data released on Monday by the government.
The previous record was 12.35 million tonnes, set in May 2018. Brazil, the world’s largest exporter of soybeans, had shipped 11.64 million tonnes of soybeans in March, according to government data, as local farmers finish collecting another bumper crop.
Rain relief in Europe piled pressure on U.S. wheat futures, although long-term dryness across the continent and in the Black Sea limited downward pressure.
Commodity funds were net buyers of CBOT wheat futures on Monday and net sellers of corn, soybean, soymeal and soyoil futures contracts, traders said. (Reporting by Naveen Thukral; Editing by Aditya Soni and Subhranshu Sahu)