March 6, 2018 / 3:20 AM / 5 months ago

GRAINS-Wheat falls more than 1 pct despite threat to U.S. crops

    * Wheat falls, but still near eight-month high 
    * Dry weather threatens U.S. wheat production
    * Soybeans, corn also fall; soybeans near 20-mth peak

    By Colin Packham
    SYDNEY, March 6 (Reuters) - U.S. wheat futures fell 1.3
percent on Tuesday as traders squared positions after a
sustained rally that saw prices hit their highest in nearly
eight months.
    Soybeans also fell, although concerns over Argentina output
kept prices at a near 20-month high. Corn edged lower as well. 
    The most active wheat futures on the Chicago Board Of Trade
 fell 1.3 percent to $5.02-1/2 a bushel by 0231 GMT, after
closing up 1.9 percent on Monday. Wheat hit $5.18-1/2 a bushel
last week, highest since July 2017. 
    "The market has been spooked by recent confirmation that dry
weather has damaged crops. After such a sustained rally, I think
it was inevitable that it would take a breather," said Phin
Ziebell, an agribusiness economist at National Australia Bank.
    "If the weather continues, we could see the first real
threat to production in several years," Ziebell added, though. 
    Still, the fall in wheat comes ahead of the next U.S.
Department of Agriculture supply and demand report, due this
week, in which analysts expect the government to show slightly
larger U.S. wheat-ending stocks. 
    The most active soybean futures slipped 0.4 percent to
$10.73-1/4 a bushel, after closing 0.6 percent higher in the
previous session. Despite the fall, soybeans are still holding
near a peak not touched since July 2016. 
    The most active corn futures slid 0.3 percent to $3.86
a bushel, having ended 0.5 percent higher on Monday. 
    Despite soybeans edging lower, analysts said a likely crimp
in Argentina output was providing a floor to prices. A poor
showing in Argentina is expected to be confirmed in the USDA
report on Thursday.
    Some of the losses there, however, are expected to be offset
by higher production in Brazil, further pressuring prices that
are also threatened by the risk that international trade
tensions could disrupt China's massive imports of U.S. soybeans.
    U.S. President Donald Trump said last week that he would
impose hefty tariffs on imported steel and aluminium to protect
U.S. producers, risking retaliation from major trade partners
such as China, Europe and Canada.
 Grains prices at  0231 GMT
 Contract       Last  Change  Pct chg  Two-day chg    MA 30  RSI
 CBOT wheat   502.50   -6.75   -1.33%       +0.50%   470.50   69
 CBOT corn    386.00   -1.25   -0.32%       +0.19%   373.12   72
 CBOT soy    1073.50   -4.00   -0.37%       +0.23%  1024.08   80
 CBOT rice     12.43  -$0.04   -0.32%       -0.28%   $12.45   59
 WTI crude     62.65   $0.08   +0.13%       +2.29%   $62.85   55
 Euro/dlr     $1.235  $0.002   +0.13%       +0.28%              
 USD/AUD      0.7778   0.001   +0.18%       +0.21%              
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential
 (Reporting by Colin Packham; Editing by Tom Hogue)
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