GRAINS-Wheat drops on worries gene-modified strain may hit demand

* Japan cancels tender to buy U.S. western white wheat
    * December corn falls for first time in six sessions

    By Colin Packham
    SYDNEY, May 30 (Reuters) - U.S. wheat dropped half a percent
on Thursday, as an unapproved genetically modified (GMO) variety
of the grain found in the state of Oregon fuelled worries that
major buyers could curb purchases from the United States.
    Japan, the top importer of U.S. wheat, has already cancelled
a tender to buy U.S. western white wheat. Analysts fear more
countries could follow.  
    "The findings of GMO in wheat is certainly a factor that has
	
weighed on wheat prices," said Joyce Liu, an investment analyst at Phillip Futures in Singapore. "I won't be surprised if other countries start cancelling or reducing their purchases of U.S. wheat, particularly Asian countries, putting pressure on wheat demand." Chicago Board of Trade July wheat fell 0.64 percent to $6.98-1/4 a bushel by 0320 GMT, after ending Wednesday up 1.3 percent. Concerns that portions of the U.S. wheat crop could be harmed by the persistent rainfall and, in some areas, flooding, are expected to cushion prices. Unfriendly crop weather will also support prices of soybeans and corn, with excessive rain late this week expected to further slow U.S. plantings. Farmers in the United States slowed the pace of planting in the past week as rain delayed the tail-end of corn seeding and pushed soybean planting to its slowest pace in 17 years, the USDA said on Tuesday. The most actively traded December corn fell 0.13 percent to $5.65 a bushel, after a five-day rally. November soybeans slipped 0.12 percent $12.87 a bushel, off Wednesday's 3-month top of $12.95. But spot soybeans extended losses, pressured by news that China, the world's largest buyer of the oilseed, had cancelled an order for U.S. soy.
The USDA said private exporters reported the cancellation of sales of 147,000 tonnes of U.S. soybeans to China for delivery this marketing year. Grains prices at 0320 GMT Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 698.25 -4.50 -0.64% +0.65% 703.38 51 CBOT corn 664.75 -0.25 -0.04% -0.26% 644.97 50 CBOT soy 1498.50 -3.25 -0.22% -0.71% 1416.98 56 CBOT rice $15.42 -$0.04 -0.26% +0.65% $15.32 53 WTI crude $93.12 -$0.01 -0.01% -1.99% $93.76 40 Currencies Euro/dlr $1.295 $0.001 +0.10% +0.75% USD/AUD 0.965 0.001 +0.13% +0.33% Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Editing by Himani Sarkar)

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