GRAINS-Wheat drops for second day on U.S. rain forecast; soybeans ease

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SINGAPORE - Chicago wheat futures slid for a second session on Tuesday with prices being weighed down by forecasts of rains in the U.S. southern Plains, which could bring relief to the drought-hit winter crop.

Soybeans edged lower, retreating from an 11-day high after the U.S. Department of Agriculture said planting was progressing ahead of market expectations, easing fears about possible yield losses.

The Chicago Board of Trade most-active wheat contract was down 0.5 percent at $5.04-3/4 a bushel, by 0319 GMT, having closed down 2.3 percent on Monday.

Soybeans gave up 0.5 percent to $10.20-1/4 a bushel, having firmed 2.3 percent in the previous session, when prices hit $10.27 a bushel, their highest since May 10.

Corn lost 0.4 percent to $4.01 a bushel.

"U.S. climate forecasters are expecting the drought conditions to ease in the Plains, which might improve wheat crop yields," said one India-based agricultural commodities analyst.

"Demand for U.S. wheat remains weak and the strength in the U.S. dollar is not helping."

Rainy weather in the drought-hit Plains wheat belt pressured prices for the grain.

The U.S. Department of Agriculture said 81 percent of the corn crop had been planted as of Sunday along with 56 percent of the soybean crop, both slightly above analysts' estimate.

On Monday, the grain complex was supported after U.S. Treasury Secretary Steven Mnuchin said the U.S. trade war with China is "on hold" after the world's two largest economies agreed to drop their tariff threats while they work on a wider trade agreement.

Traders are anticipating soybeans to be among the greatest beneficiaries of the easing trade tensions.

Still, cheaper supplies from South America are expected to keep a lid of U.S. prices.

Orders for nearly 1 million tonnes of U.S. soybean exports were cancelled last week, according to U.S. government data, as cheap supplies from Brazil made U.S. cargoes less attractive to buyers.

Commodity funds were net buyers of CBOT soybean, soymeal and soyoil futures contracts on Monday, and net sellers of wheat and corn, traders said. Estimates for fund activity in corn ranged from selling 10,000 contracts to buying 2,500.

Grains prices at 0319 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI

CBOT wheat 504.75 -2.50 -0.49% +1.46% 500.68 50

CBOT corn 401.00 -1.75 -0.43% +1.45% 397.81 58

CBOT soy 1020.25 -5.00 -0.49% +2.54% 1035.67 53

CBOT rice 12.23 -$0.01 -0.04% -2.20% $12.94 31

WTI crude 72.46 $0.22 +0.30% +1.66% $69.20 73

Currencies

Euro/dlr $1.178 $0.001 +0.08% -0.08%

USD/AUD 0.7577 0.007 +0.88% +0.91%

Most active contracts

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight