Wheat up on dryness fears in U.S., other exporters

(Reuters) – Chicago wheat futures rose on Tuesday with renewed focus on dryness in parts of the U.S. Plains grain belt and parched crops in several other major wheat exporting regions.

Soybeans were little changed with the market weighing up support from hopes of easing tension between the U.S. and China against the bumper soy crop in Brazil and good progress with U.S. bean plantings.

Chicago Board of Trade July wheat was up 1.4 percent at $5.14-3/4 a bushel, at 1112 GMT after falling 2.1 percent on Monday.

July soybeans rose 0.2 percent to $10.27-1/4 a bushel, after jumping 2.7 percent on Monday after the United States and China agreed to drop trade tariff threats while they work on a wider trade agreement. July corn rose 0.3 percent to $4.04-1/4 a bushel.

“Soybeans are again being underpinned by the signs of a significant reduction in the trade tension between the United States and China,” said Matt Ammermann, commodity risk manager with INTL FCStone. “Naturally the China trade dispute is not solved yet but the picture is looking better than it was and it is positive that China, the world’s biggest soybean importer, could resume normal U.S. soybean purchasing.”

“Attention is turning more to fundamentals in the soybean market, especially the large soybean harvest in Brazil and large Brazilian exports.”

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

“Wheat is once more concerned about dryness in parts of the U.S. Plains,” Ammermann said. “Dryness in other large wheat producing regions is also a theme supporting wheat, with dryness ‘talk’ also in the Black Sea region, Australia and Canada.”

Official figures late on Monday showed good progress with U.S. soybean plantings but a more mixed picture on corn.

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. <US/COR> <US/SOY>

“Corn is supported by several factors including concern about the U.S. crop and strong demand, Ammermann added. “Corn planting progress in some U.S. states is looking rather slow.”

“I think fear continues to mount amid the dryness we have in the Plains and whether that will creep into the growing areas for corn.”