Wheat rises for second day as U.S. rains may damage winter crop

• Wheat rises on threat of U.S. rains for maturing crop
• Soybeans up, regain Tuesday’s losses on supply concerns

By Naveen Thukral

SINGAPORE, May 25 (Reuters) – U.S. wheat futures rose for a second session on Wednesday with prices underpinned by forecasts of rains in the U.S. Plains which could potentially damage the maturing winter crop.

Soybeans rose half a percent, rebounding from the previous session’s decline on concerns over lower supplies from Argentina.

Showers in the U.S. Plains winter wheat belt will diminish in the southwest the rest of this week allowing some improvement in harvest conditions, but southeastern areas remain unfavourably wet, Commodity Weather Group said.

“The wheat market is recovering as investors are covering short positions and we have forecasts of rains for the U.S. crop which could be harmful for quality and yields,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

Chicago Board of Trade most-active wheat contract   advanced 0.3 percent to $4.65-1/4 a bushel. It touched its lowest since May 12 at $4.57-3/4 a bushel on Tuesday.

Soybeans   climbed 0.5 percent to $10.60 a bushel, and corn   added 0.1 percent to $3.98 a bushel.

The U.S. Department of Agriculture (USDA) rated 62 percent of the U.S. hard red winter wheat crop in good-to-excellent condition as compared with 45 percent at this time of last year, the agency said in its weekly progress report on Tuesday.

The U.S. corn crop was 86 percent planted by Sunday, ahead of the five-year average of 85 percent but behind an average of analyst expectations for 88 percent, the USDA said.

Commodity funds were net sellers of CBOT soybean futures contracts on Tuesday and net buyers of wheat and soymeal, traders said.

Views on fund activity in corn were mixed, with estimates ranging from net sellers of 10,000 contracts to net buyers of

6,000.

Trader estimates of net fund selling in soybeans ranged from 3,000 to 8,000 contracts. Estimates of net fund buying in wheat ranged from 1,000 to 5,000 contracts.

Ukraine’s grain exports may reach a new record of around 40 million tonnes this season thanks to high sales of wheat, analysts and a traders’ union said on Tuesday.

Grain traders union UZA and a team of industrial analysts said wheat exports could reach 15.6 million tonnes, while maize shipments could total 19.5 million tonnes.