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GRAINS-Wheat jumps 3 pct on U.S. Plains frost, Ukraine tensions

Freeze warnings posted in southern U.S. Plains

* Trades monitor separatist unrest in Ukraine

* Corn follows wheat; strong export data lends support

* Coming up: weekly USDA crop progress report at 2000 GMT

(Writes through with updated prices, details; changes byline, dateline) CHICAGO, April 14 (Reuters) - U.S. wheat futures surged more than 3 percent on Monday as traders responded to fresh tensions in the Black Sea region, coupled with the threat of freeze damage to crops in the U.S. Plains. Corn and soybeans followed wheat higher, with corn buoyed by strong weekly export inspections data. At the Chicago Board of Trade as of 12:08 p.m. CDT (1708 GMT), May wheat was up 22 cents at $6.82-1/4 per bushel, while the KC May hard red winter wheat contract was up 26-1/4 cents at $7.45-3/4. May corn was up 7-1/4 cents at $5.05-3/4 a bushel and May soybeans were up 6 cents at $14.69 a bushel. Wheat posted the biggest gains as traders eyed weather forecasts for the southern Plains hard red winter wheat belt. The U.S. National Weather Service posted hard freeze warnings for Tuesday morning across western Oklahoma and parts of northern Texas. Crop ratings for the U.S. winter wheat crop are already at a 12-year low following a brutal winter in the Plains.

"We are looking at a freeze event in hard red winter wheat areas, this morning and tomorrow. Tomorrow morning is the concern. The forecasts are a little colder than they were Friday," said Austin Damiani, a broker with Frontier Futures in Minneapolis. Winter wheat becomes more vulnerable to freeze injury as it matures in the spring. Crops in the "jointing" stage of growth can be hurt when temperatures fall to 24 degrees Fahrenheit (minus 4.4 Celsius) for two hours. For crops in the more advanced "boot" stage, the threshold for damage is two hours at 28 F (minus 2.2 C) or below. The U.S. Department of Agriculture said 52 percent of Oklahoma's wheat had reached the jointing stage by April 6. In Kansas, the top U.S. wheat state, 14 percent of the crop was jointing. The government was scheduled to release updated crop progress figures later on Monday. "The areas I would be most concerned about are far northwest Texas, the Oklahoma Panhandle, maybe parts of southwest Kansas," said Don Keeney, a meteorologist with MDA Weather Services. "I am expecting most areas will escape damage. There are freeze warnings across a wider area (for Tuesday), but I don't think temperatures are going to get cold enough, with lows in the upper 20s," Keeney said. Worries about the Black Sea region buoyed the market overnight. Tensions rose after Ukraine's president threatened military action after pro-Russian separatists occupying government buildings in the east ignored an ultimatum to leave.

The flare-up came less than a month after Russia completed its annexation of Ukraine's southern Crimea peninsula. Ukraine is a significant exporter of wheat and the world's No. 3 corn supplier. "If tensions between Ukraine and Russia intensify further, this could have a negative impact on wheat shipments from the Black Sea region, which would then increase demand from other exporting countries," Commerzbank said in a note. It added, however, that most of the exports out of the region, one of the world's largest exporters of corn and wheat, have already been processed.

CORN, SOY CLIMB Corn followed wheat higher, while reminders of strong export demand added support. The USDA reported export inspections of U.S. corn in the latest week at 1.449 million tonnes, above a range of trade estimates. Cold temperatures in the U.S. Midwest early this week following weekend rains will slow corn planting, but drier conditions are forecast for next week. Ahead of USDA's weekly crop progress report later on Monday, analysts estimated U.S. farmers had seeded 1 to 5 percent of their 2014 corn crop as of Sunday. The average trade estimate was 3 percent and compares with the seasonal average of 6-7 percent seeded by mid-April. Soybean futures were firm but worries about buyers in China, the top global soy consumer, defaulting on purchases hung over the market.

Prices at 12:08 p.m. CDT (1708 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 505.75 7.25 1.5% 19.8% CBOT soy 1469.00 6.00 0.4% 11.9% CBOT meal 476.50 3.50 0.8% 8.9% CBOT soyoil 42.16 0.06 0.1% 8.6% CBOT wheat 682.00 21.75 3.3% 12.7% CBOT rice 1544.00 -21.50 -1.4% -0.5% EU wheat 214.00 4.25 2.0% 2.4% US crude 104.02 0.28 0.3% 5.7% Dow Jones 16,178 152 1.0% -2.4% Gold 1327.20 9.23 0.7% 10.1% Euro/dollar 1.3828 -0.0056 -0.4% 1.3% Dollar Index 79.6970 0.2450 0.3% -0.4% Baltic Freight 989 -13 -1.3% -56.6%

(Additional reporting by Sybille de La Hamaide and Colin Packham; Editing by Joseph Radford, Anthony Barker and Meredith Mazzilli)


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Contributing Editors

  • adrian muller has conducted seminars for the chicago board of trade, including a key series in 1999 which cautioned about a top in the equity markets (see his article “top experts and statistics on the dow”). adrian muller has appeared on cable tv financial programs with analysis on the futures markets and equity market directional forecasts. he has been quoted in barron's, the wall street journal, and futures magazine.

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