GRAINS-Wheat rises on US drought, soybeans near 7-week high

SINGAPORE, May 5 (Reuters) - Chicago wheat futures rose for a third straight session on Tuesday, supported by crop damage from a severe drought in the U.S. Plains, although forecasts of some rainfall eased concerns.

Soybeans were largely unchanged after climbing on Monday to their highest since mid-March as higher crude oil prices and strong demand underpinned prices.

FUNDAMENTALS

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 rose 0.6% to $6.44-1/2 a bushel, as of 0028 GMT. Last week, the market climbed to its highest in two years.

Soybeans Sv1 eased quarter of a cent to $12.22-1/2 a bushel and corn Cv1 fell 0.1% to $4.85-1/2 a bushel.

Forecasts of rains in the parched U.S. wheat belt limited the upside in prices, though showers may come too late for areas where the drought has already done irreversible damage to the winter crop, traders said.

The U.S. Department of Agriculture reported 31% of the nation's winter wheat crop was in good to excellent condition in a weekly report, up from 30% last week but still the lowest for this point in the year since 2023 as the crop struggles with the drought.

Some farmers in the central and eastern U.S. grain belt have yet to begin planting corn and soybeans due to wet, cold conditions.

In news, Brazil's soybean production is expected to reach 181.6 million metric tons in 2025/26, consultancy firm StoneX said on Monday, raising its outlook by around 1% from an April projection.

MARKET NEWS

Oil prices jumped 6% on Monday and stocks fell as Iran escalated its military campaign, hitting several ships in the Strait of Hormuz and setting a UAE oil port ablaze. MKTS/GLOB

DATA/EVENTS (GMT)

1230 US International Trade $ Mar

1345 US S&P Global Comp, Scvs PMI Final Apr

1400 US ISM N-Mfg PMI Apr

1400 US New Home Sales-Units Mar