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GRAINS-Wheat drops for 2nd day as US weather improves, soybean prices ease

SINGAPORE, May 7 (Reuters) - Chicago wheat futures slid 1.6 percent on Monday, falling for a second session as an improving weather outlook for the U.S. winter crop weighed on prices. U.S. soybeans lost more ground on lack of demand from top importer China amid a trade dispute between the two nations.

FUNDAMENTALS

* Recent rains have eased concerns over dryness hurting the Hard Red Winter wheat crop in the U.S. southern Plains.

* However, scouts on an industry tour on Thursday projected that drought-hit Kansas, the top U.S. wheat-growing state, may produce its smallest crop since 1989.

* There is additional pressure on the wheat market stemming from forecasts of bumper production in the Black Sea region.

* For soybeans, there is disappointment that trade talks between Washington and Beijing did not move closer to a deal to resolve the mounting dispute that has crimped U.S. crop sales to China.

* The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies.

* U.S. farmers were hoping for a quick resolution to the conflict after China last month threatened tariffs against a range of U.S. goods, including a 25-percent duty on soybeans.

* U.S. soybean sales to China over the last four weeks are down 10 percent from a year ago, according to U.S. trade figures. This is a blow to farm country, which helped boost President Donald Trump into office in the 2016 election.

* Large speculators raised their net long position in Chicago Board of Trade corn futures in the week to May 1, regulatory data released on Friday showed.

* The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.

MARKET NEWS

* Asian shares crept higher on Monday after a tame reading on U.S. wages lessened the risk of faster rate hikes by the Federal Reserve, although Sino-U.S. trade tensions and a looming deadline for the Iranian nuclear deal argued for caution.

DATA AHEAD (GMT)

0600 Germany Industrial orders Mar 0830 Euro zone Sentix index May 1400 U.S. Employment trends Apr :: China Forex reserves Apr

Grains prices at 0029 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 518.00 -8.25 -1.57% -1.66% 489.07 68 CBOT corn 403.75 -2.50 -0.62% -0.31% 394.78 69 CBOT soy 1031.75 -5.00 -0.48% -1.08% 1046.88 42 CBOT rice 12.98 $0.04 +0.35% -0.42% $12.99 38 WTI crude 69.80 $0.08 +0.11% +2.75% $66.41 69

Currencies

Euro/dlr $1.196 -$0.002 -0.19% +0.12% USD/AUD 0.7525 0.000 -0.05% +0.41%

Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential

(Reporting by Naveen Thukral Editing by Joseph Radford)