GRAINS-Wheat rallies 3 pct on U.S. production fears

(Adds Ukraine news; updates prices)

* Temperatures across Southern Plains soar

* Corn edges down, soybeans firm

By Colin Packham

SYDNEY, May 5 (Reuters) – U.S. wheat futures rose as much as 3.4 percent on Monday to an 11-month high on fears that recent hot, dry weather will curb production in the United States, the world’s largest exporter.

Corn edged lower for a fourth straight session, though the strength of wheat capped losses. Soybeans rose for a second straight session.

Chicago Board of Trade July wheat futures rose 2.2 percent to $7.31-3/4 a bushel by 0432 GMT, just below the session peak of $7.40-1/2 a bushel, the highest since late June 2013.

“It has been very hot in the Southern Plains, with temperatures between 90-100 degree Fahrenheit (32.2-37.8 Celsius),” said Andrew Woodhouse, grains analyst, Advance Trade Australasia.

“It puts another nail in the coffin of the U.S. hard-red wheat crop.”

The U.S. National Weather Service said temperatures across the Southern wheat Plains topped 90 degrees Fahrenheit on Sunday.

Forecasts called for temperatures across the region to hit in excess of 100 degrees Fahrenheit on Monday and Tuesday, raising the risk of further damage to the hard-red wheat crop.

The U.S. Department of Agriculture said on April 29 that the winter wheat crop was rated 33 percent good to excellent, down 1 point from the previous week and well below the five-year average of 49 percent.

Hard-red winter wheat yields were expected to decline from a year ago due to dry conditions at the time of planting, followed by a harsh winter that likely damaged a larger-than-normal portion of the crop.

An annual crop tour of the top-growing state of Kansas on Thursday estimated the poorest production prospects in more than a decade, while Informa Economics on Friday slashed its U.S. winter wheat crop estimate by 120 million bushels to 1.496 billion bushels, the analytics firm said in a client note.

Rising tensions in Ukraine were also lending support to wheat, analysts said.

Pro-Russian militants stormed a Ukrainian police station in Odessa on Sunday and freed nearly 70 fellow activists as the country’s leaders lamented a police force they said was widely undermined by graft or collaboration with separatists.

July corn futures fell 0.1 percent to $4.99 a bushel, having closed down 1.5 percent on Friday.

Forecasts for dry weather across the U.S. Midwest eased fears of continued delays in plantings, which had underpinned gains in recent weeks.

July soybeans future rose 0.3 percent to $14.75-1/2 a bushel, having closed 0.7 higher in the previous session.

Grains prices at 0432 GMT Contract

Last

Change Pct chg Two-day chg MA 30 RSI CBOT wheat

731.75

15.75 +2.20%

+3.46%

697.11 67 CBOT corn

499.00

-0.50 -0.10%

-1.58%

504.80 39 CBOT soy

1475.50

4.75 +0.32%

+0.99%

1467.65 48 CBOT rice

$15.47 -$0.03 -0.16%

-0.32%

$15.52 54 WTI crude

$99.78

$0.02 +0.02%

+0.02%

$101.52 35 Currencies

Euro/dlr

$1.387 $0.000 +0.03%

+0.04% USD/AUD

0.926 -0.001 -0.12%

-0.12% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Editing by Muralikumar Anantharaman)

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