GRAINS-U.S. wheat gains on strong export prospects

* Rain forecasts weigh on corn, soybean markets

* Corn on track for sixth straight weekly loss (Adds U.S. trading, comments, changes byline/dateline, previous PARIS/SINGAPORE)

By Mark Weinraub

CHICAGO, Aug 1 (Reuters) – U.S. wheat futures rose on Friday for the third straight day on hopes U.S. supplies will gain more traction on the export market owing to concerns about the quality of European crops, traders said.

High-protein K.C. hard red winter wheat, prized by exporters, led the gains with a 1.4 percent rally.

Corn and soybeans fell as the weather forecast turned wetter for some of the drier areas of the U.S. Midwest, boosting expectations for huge crops this fall.

Worries about the wheat harvest in Europe producing supplies that are not suitable for export weighed on Euronext futures but propped up the U.S. wheat contracts, which have treaded water near four-year lows hit earlier this month.

“Better hopes for (U.S.) exports are finally emerging, though the global market still looks like it has plenty of cheap wheat,” said Bryce Knorr, senior editor at Farm Futures Magazine. The competitiveness of Russian wheat, which made a clean sweep of sales in the Egyptian tender, could curb a rebound in U.S. prices. Forecasts for good yields in the Canadian crop despite heavy flooding early in the season also kept gains in check.

At 11:08 a.m. CDT (1608 GMT), Chicago Board of Trade wheat for September delivery was up 4-1/4 cents at $5.34-1/2. The K.C. September contract was up 8-1/2 cents at $6.34-1/4 a bushel.

“People are buying into good quality U.S. wheat and selling what is seen as mediocre EU wheat,” one European trader said.

CBOT front-month wheat was on track for a weekly loss of 0.7 percent.

CBOT September corn was down 3 cents at $3.54 a bushel while August soybeans were 9-1/2 cents lower at $12.15 a bushel. The new-crop November soybean contract shed 23-1/2 cents, or 2.2 percent, to $10.58-1/2 a bushel.

“Weather forecasts continue to trend more and more beneficial as we enter the key soy development month,” said Matt Zeller, director of market information at INTL FCStone said in a note to clients.

For the week, soybeans were up 0.3 percent and corn was 2.7 percent lower. Corn has fallen for six weeks in a row, shedding 22 percent during that time.

Prices at 11:15 a.m. CDT (1615 GMT)                          
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  353.50    -3.25  -1.0%  -16.2%
 CBOT soy                  1212.25   -12.25  -1.0%   -7.6%
 CBOT meal                  386.20    -5.10  -1.3%  -11.8%
 CBOT soyoil                 35.48    -0.63  -1.7%   -8.6%
 CBOT wheat                 535.25     5.00   0.9%  -11.6%
 CBOT rice                 1282.00   -16.50  -1.3%  -17.3%
 EU wheat                   171.25     0.75   0.4%  -18.1%
 US crude                    97.27    -0.89  -0.9%   -1.2%
 Dow Jones                  16,454     -109  -0.7%   -0.7%
 Gold                      1295.41    13.32   1.0%    7.5%
 Euro/dollar                1.3430   0.0042   0.3%   -1.6%
 Dollar Index              81.2800  -0.1760  -0.2%    1.6%
 Baltic Freight                751       -4  -0.5%  -67.0%
 In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb. (Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Tom Brown)

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