June 3, 2019 / 12:18 PM / 3 months ago

GRAINS-Wheat rallies as U.S. rain, Black Sea dry spell fuel crop concerns

    * U.S. wheat rebounds after closing lower on Friday
    * U.S. wheat belts including Kansas set for more rain
    * Corn, soybeans subdued before weekly planting update

 (Updates with European trading, changes byline/dateline)
    By Gus Trompiz and Naveen Thukral
    PARIS/SINGAPORE, June 3 (Reuters) - U.S. wheat futures
rallied on Monday on concerns about harvest risks as more heavy
rain was forecast in some U.S. grain belts and warm, dry weather
was expected in top wheat exporter Russia.
    However, corn and soybeans inched lower as the markets
digested a U.S. threat of tariffs against Mexico while awaiting
a weekly U.S. crop planting report to see if historic rain
delays in seeding crops continued last week.
    The most-active wheat contract on the Chicago Board Of Trade
 was up 1.5% at $5.10-1/2 a bushel, as of 1158 GMT. 
    Kansas hard red winter wheat led overnight gains in U.S.
futures, with spot prices trading up 2.3% at $4.84.
    Torrential rain, which has slowed corn planting to its
slowest pace on record, is increasingly causing concern about
damage to U.S. wheat.
    Latest forecasts showed more heavy rain in part of the
central U.S. Plains in the coming two weeks, including in major
growing state Kansas. 
    "Wheat has gained largely on the back of rally in corn
prices but we have rains hitting the U.S. crop and now people
are talking about dryness in the Black Sea region, which reduced
yields in Russia and Ukraine," a Singapore-based grains trader
    After intense heat in southern Russia in the past few days,
weather outlooks were for more warmer than average temperatures
and limited rain in the week ahead.
    Wheat, corn and soybean futures dropped on Friday, giving up
some of their hefty gains during May, after U.S. President
Donald Trump threatened to place tariffs on imports of goods
from Mexico in response to illegal immigration.
    The move raised fears about agricultural trade with Mexico,
the largest buyer of U.S. corn, and wider effects on economic
growth amid an ongoing trade dispute between Washington and
    CBOT corn was down 0.4% at $4.22-1/4 a bushel, while
soybeans inched down 0.1% to $8.77-1/4 a bushel.
    Grain traders were looking ahead to the U.S. Department of
Agriculture's weekly crop progress report, issued after the
market close on Monday, to see if soggy field conditions
continued to blight corn and soybean planting efforts in the
    "If it turns out that a substantial proportion of the
acreage still has not been sown, this could lend further
buoyancy to the corn price," Commerzbank said.
    But upward momentum may be curbed after speculative
investors reduced sharply their net short positions in corn
during the recent rally, the bank added.
 Prices at 1158 GMT                                               
                              Last  Change    Pct     End  Ytd Pct
                                             Move    2018     Move
  CBOT wheat                510.50    7.50   1.49  503.25     1.44
  CBOT corn                 425.25   -1.75  -0.41  375.00    13.40
  CBOT soy                  877.25   -0.50  -0.06  895.00    -1.98
  Paris wheat Sep           185.50    0.25   0.13  190.50    -2.62
  Paris maize Jun           165.75    0.25   0.15  184.50   -10.16
  Paris rape Aug            370.00   -0.25  -0.07  362.25     2.14
  WTI crude oil              54.16    0.66   1.23   45.41    19.27
  Euro/dlr                    1.12    0.00   0.10  1.1469    -2.54
 Most active contracts - Wheat, corn and soy US cents/bushel,
 Paris futures in euros per tonne

 (Reporting by Gus Trompiz in Paris and Naveen Thukral in
Singapore, Editing by Sherry Jacob-Phillips and Alexander Smith)
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