GRAINS-Soybeans, corn drop on crude weakness; US dryness in focus

By Naveen Thukral

SINGAPORE, May 6 (Reuters) - Chicago soybeans and corn slid for a second session on Wednesday, giving up recent gains as a decline in crude oil prices pressured grains and oilseed futures.

The wheat market also fell, although losses were limited by a severe drought curbing U.S. yields.

"It is the influence from crude oil which is impacting prices of soybeans and corn," said one trader in Singapore. "We don't see big drop in wheat prices as any decline is a buying opportunity at this moment, given the U.S. drought."

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 fell 0.1% at $12.10-3/4 a bushel, as of 0403 GMT, having dropped around 1% in the previous session.

Corn Cv1 lost 0.5% to $4.77-1/2 a bushel and wheat Wv1 gave up 0.5% to $6.24-3/4 a bushel.

On Monday, corn hit its highest since April 2025 and soybeans climbed to their highest in almost eight weeks. Wheat jumped to a two-year top last week.

Oil prices fell for a second day on expectations that bottled up supply from the key Middle East producing region could resume flowing after U.S. President Donald Trump indicated a peace deal may be possible.

Conflict-driven fluctuations in oil prices have influenced grain markets, as corn and soybean oil are widely used for biofuel production.

Forecasts of rain in some U.S. wheat zones this week also curbed wheat prices, though the precipitation may come too late for areas where drought has done irreversible damage, traders said.

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

A group of Oklahoma crop experts on Tuesday projected Oklahoma's 2026 winter wheat harvest at 47.799 million bushels, with an average yield of 23.11 bushels per acre, following an annual tour of the state, said Mike Schulte, executive director of the Oklahoma Wheat Commission.

The estimates were sharply lower than the 10-year yield average of 94.499 million bushels in Oklahoma, among the top U.S. wheat-producing states.