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Wheat drops for second session as Ukraine grain export deal resumes

By Naveen Thukral and Sybille de La Hamaide

PARIS/SINGAPORE, Nov 3 (Reuters) - Chicago wheat lost more ground on Thursday after Russia reversed a decision to suspend its participation in a Black Sea grain export deal, easing concerns over food supplies.

Soybeans slid from a six-week high scaled in the previous session, and corn also fell.

"Russia resuming participation in the Black Sea grain corridor prompted the fall," said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.7% at $8.31-1/4 a bushel as of 1200 GMT, after dropping more than 6% in the previous session.

Soybeans gave up 1% to $14.39-1/2 a bushel, having climbed to their highest since Sept. 22 on Wednesday at $14.58 a bushel, while corn lost 0.8% to $6.82 a bushel.

Wheat prices came under pressure on Wednesday after Russia said it would renew its participation in a U.N.-brokered grain export corridor just four days after suspending its role in the deal.

However, traders and analysts said Russia's U-turn does not remove uncertainty about whether the agreement, which expires on Nov. 19, will be extended. The Kremlin said on Thursday it had not committed to staying in the deal beyond its current expiry date.

"The extension of the agreement initially established for four months will expire in three weeks and will probably be subject to new negotiations. Uncertainty remains on the markets and new surprises cannot be excluded," French consultancy Agritel said in a note.

Support for grain prices could come from Australia where flooding and excessive rains across key parts of wheat-growing areas have resulted in extensive damage to what was expected to be a record high-quality crop just a few weeks ago.

Corn took cues from wheat, with additional pressure noted from news that China's customs agency had updated its list of approved Brazilian corn exporters, potentially clearing the way for exports of Brazilian corn to China.

Soybean prices have firmed on the back of strength in global vegetable oil markets, as well as optimism about soybean export demand from China.

Brazilian authorities said on Wednesday they are making headway in efforts to clear blockades set up across the country by truckers to protest President Jair Bolsonaro's narrow loss to leftist Luiz Inacio Lula da Silva in an Oct. 30 election.

The protests have disrupted fuel distribution, industrial activity, food deliveries to supermarkets and shipments of grains to ports.

(Reporting by Naveen Thukral and Sybille de La Hamaide; Editing by Sherry Jacob-Phillips, Rashmi Aich and Jan Harvey)

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