GRAINS-Wheat eases as rain forecasts offset war worries
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, May 4 (Reuters) - Chicago wheat ticked lower on Monday as rain was forecast to reach parched U.S. wheat belts this week, though losses were curbed by uncertainty over whether a U.S. plan to end the effective blockade in the Strait of Hormuz can succeed.
Corn inched up while soybeans rose to a seven-week peak, as traders also assessed the risk of rain delays to U.S. spring planting.
Strength in crude oil during the U.S.-Iran conflict has tended to support grain prices, given that corn and soyoil are widely used for biofuel, while rising fuel and fertiliser prices could affect agricultural production.
The most-active wheat contract on the Chicago Board of Trade Wv1 was 0.1% down at $6.374 a bushel, as of 1136 GMT.
The contract struck a nearly two-year peak of $6.71-1/2 hit last Wednesday as persistent drought and a cold spell maintained fears of yield losses in the U.S. hard red winter wheat crop.
FORECASTS OF RAINFALL AFTER DRY SPELL
But the latest forecasts suggested very dry western parts of the U.S. Plains may receive significant rainfall this week.
"The market remains undecided and sensitive to the evolution of the situation with precipitation on the Great Plains," Argus Media analysts said of wheat.
Traders will get an update on field conditions from a weekly U.S. Department of Agriculture crop report later on Monday.
Wheat briefly turned higher as crude oil surged after Iran's navy reported that it had prevented a U.S. warship from entering the Strait of Hormuz. U.S. Central Command denied that a U.S. warship was attacked. O/R
The news undermined any expectations a U.S. scheme to help ships blocked by the U.S.-Iran conflict to exit the Gulf can succeed.
CBOT soybeans Sv1 added 0.6% to $12.10-1/2 a bushel, after reaching their highest since March 16 at $12.12-1/2. CBOT corn Cv1 ticked up 0.1% to $4.80-3/4 a bushel.
Traders will assess the USDA crop report after Monday's close for planting progress. Some farmers in the central and eastern U.S. grain belt have yet to begin planting due to wet, cold conditions, according to traders.
Soybeans drew support from vegetable oil markets. Palm oil rose in Malaysia as the country's plan to raise its biodiesel incorporation level underscored greater interest in biofuel in response to war disruption to oil supply. POI/
Prices at 1136 GMT |
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| Last | Change | Pct Move |
CBOT wheat Wv1 | 637.00 | -0.75 | -0.12 |
CBOT corn Cv1 | 480.75 | 0.50 | 0.10 |
CBOT soy Sv1 | 1210.50 | 7.25 | 0.60 |
Paris wheat BL2c1 | 190.75 | -0.75 | -0.39 |
Paris maize EMAc1 | 224.00 | 0.50 | 0.22 |
Paris rapeseed COMc1 | 525.00 | 4.25 | 0.82 |
WTI crude oil CLc1 | 105.34 | 3.40 | 3.34 |
Euro/dollar EUR= | 1.17 | 0.00 | -0.19 |
Most active contracts - Wheat, corn and soy U.S. cents/bushel, Paris futures in euros per metric ton | |||
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