CBOT wheat ends higher on Black Sea tensions, softer dollar

CHICAGO, June 2 (Reuters) - Chicago Board of Trade wheat futures closed higher on Monday as rising tensions in the Black Sea region, a weaker U.S. dollar and some uncertainty about global production prospects triggered speculative short-covering, traders said.

• Commodity funds hold a large net short position in CBOT wheat futures, leaving the market prone to short-covering rallies.

• CBOT July soft red winter wheat WN25 settled up 5 cents at $5.39 per bushel.

• K.C. July hard red winter wheat KWN25 ended up 6-1/2 cents at $5.39-3/4 a bushel and Minneapolis July spring wheat MWEN25 rose 1-3/4 cents to finish at $6.27-1/4 a bushel.

• Russia and Ukraine began their second round of direct peace talks since 2022 in Istanbul on Monday with no sign they are closer to an agreement, one day after Kyiv struck some of Moscow's nuclear-capable bombers far inside Russian territory.

• Ahead of the U.S. Department of Agriculture's weekly crop progress report due later on Monday, analysts surveyed by Reuters on average expected the government to raise its ratings for the U.S. spring wheat crop after last week's ratings fell well below trade expectations.

• U.S. winter wheat ratings were seen as steady as the harvest of that crop begins.

• The USDA reported export inspections of U.S. wheat in the latest week at 552,910 metric tons, in line with trade expectations for 300,000 to 625,000 tons. USDA/I

• Australia's wheat production is projected to drop 10% this year to 30.6 million metric tons, but remain above the 10-year average, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said.

• Egypt's state grains buyer Mostakbal Misr in April agreed to buy around 180,000 metric tons of French wheat from two top European traders, trading sources said, in a sign of growing acceptance of the new entity by global suppliers.