Wheat slips on Australia rain relief; trade weighs on soy, corn

PARIS/SINGAPORE: Chicago wheat slid 2 percent on Monday as rain expected in parched growing belts in Australia tempered concerns about global supply risks and shifted attention to broader worries about trade tensions.

Soybeans fell more than 1 percent as an ongoing spat between Washington and Beijing threatened to hamper trade in the oilseed, the most valuable US farm export to China.

Crop-friendly weather in the US Midwest United States continued to weigh on prices of soybeans and also corn, which edged lower.

The Chicago Board Of Trade most-active wheat contract was down 2.1 percent at $4.93-3/4 a bushel by 1203 GMT, adding to a slight loss on Friday.

"Some areas in southern and western parts of Australia have had good rains, things are looking better than what was a few weeks ago" said Phin Ziebell, agribusiness economist at National Australia Bank.

"There are more rains forecast but some areas might have missed the opportunity to plant wheat because of the drought."

However, analysts said dry weather risks in several major wheat-growing zones, including the Black Sea region and northern Europe, could come back to the fore.

"Concerns intensifying for wheat, rapeseed and corn across Europe as hot and dry weather looks to stick around through at least end of June," Thomson Reuters Agriculture Research analysts said in a note.

Like wider financial markets, grain and soybeans are under pressure amid escalating trade tensions between the United States and China.

The US Treasury Department is crafting rules that would block firms with at least 25 percent Chinese ownership from buying US companies involved in "industrially significant technology," the Wall Street Journal said.

Soybeans were down 1.1 percent at $8.843/4 a bushel and corn eased 1.0 percent to $3.53-3/4 a bushel.

Beneficial weather across much of the Midwest also curbed corn and soy prices, despite some localised flooding.

Rains soaked portions of the US Corn Belt last week, swamping fields in South Dakota, Minnesota and Iowa, and more storms are expected early this week ahead of a warm-up, meteorologists said Friday.

Grain markets will get an update on US crop conditions from a weekly US Department of Agriculture (USDA) report later on Monday.

The market focus is also shifting towards this Friday's USDA US acreage  and stocks reports, among the most closely followed data releases of the year.