*
Market expects deal extension but Russia seeks shorter
term
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U.S., Argentine drought monitored but big Brazil crops
seen
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U.S. banking fallout monitored after volatile Monday
(Updates with European trading, changes byline/dateline)
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, March 14 (Reuters) - Chicago and Paris
wheat futures edged lower on Tuesday as volatility fuelled by a
U.S. banking crisis eased and a wartime export corridor from
Ukraine was expected to continue despite differences between
Moscow and Kyiv in ongoing talks.
Corn and soybeans also ticked down as traders monitored
weather conditions in U.S. and South American crop belts.
The most-active wheat contract on the Chicago Board of Trade ended the overnight trading session down 0.5% at $6.81 a
bushel.
In Europe, May wheat on Euronext was down 1.1% by
1304 GMT.
Wheat markets had gained ground on Monday, recovering from
their lowest in over a year on Friday, partly due to
short-covering as investors were rattled by the collapse of
Silicon Valley Bank.
Share and oil prices remained under pressure on Tuesday but investor attention turned to U.S. consumer price data. Grain markets were assessing developments in negotiations to extend the Black Sea corridor deal, with Kyiv rejecting a Russian push for a shorter 60-day extension this time. "All the same, both sides appear to want to maintain the grains corridor and are therefore likely to agree to its extension," Commerzbank said in a note. "That said, both sides will probably continue to attempt to push through changes to the deal, meaning that considerable potential for conflict remains." Russia and Ukraine are among the world's largest grain exporters and the creation of the corridor has helped cool global food commodity prices that hit record highs after Russian invaded Ukraine a year ago. Drought in part of the U.S. Plains was also underpinning wheat prices. The U.S. Department of Agriculture (USDA) in a weekly crop report on Monday rated 17% of the winter wheat in top producer Kansas in good-to-excellent condition, while estimating 55% of U.S. winter wheat is produced in an area under drought. CBOT corn lost 0.5% to $6.10-1/4 a bushel and soybeans inched down 0.1% to $14.90-1/2 a bushel.
Drought losses in Argentina have supported corn and soy prices, though the prospect of big harvests in Brazil has tempered supply concerns.
(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Rashmi Aich, Sherry Jacob-Phillips and Sharon Singleton)
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))