* India makes policy U-turn as heat wave hits harvest
* Ban rattles market faced with Ukraine war, adverse weather
* Corn, soybeans also higher
CHICAGO, May 16 (Reuters) - Chicago wheat futures hit the
daily 70-cent trading limit cap on Monday after India banned
exports of the grain, an abrupt policy change that fanned
concerns about global supplies strained by Russia's invasion of
The wheat rally sent spillover strength to corn futures, as
global buyers, who were banking on supplies from the world's
second-biggest wheat producer, scrambled to respond, traders
said. But it weighed on soyoil futures, amid questions of ripple
effects the ban could have on India's import demand for
vegetable oils, they said.
Chicago Board of Trade's soft red winter wheat deferred
months all hit contract highs. And contract highs were hit
across the board for K.C. hard red winter wheat and MGEX spring
wheat futures, too.
The most-active CBOT soft red winter wheat contract
settled the day up the daily trading limit of 70 cents at
$12.47-1/2 a bushel - $1.16 a bushel off the $13.63-1/2 record
Trading limits for CBOT and K.C. wheat will expand to $1.05
for Tuesday's session, CME Group said Monday afternoon.
India's embargo, prompted by a heat wave that has cut
harvest prospects and sent domestic prices soaring, has hit
hopes of record wheat shipments from the country in the coming
year that would alleviate war-reduced supply from Ukraine.
Drought in the southern U.S. Plains and parts of France are
eroding production potential in other major exporting countries,
And the global supply chain ripple effects off the news were
almost immediate: India's wheat export ban trapped some 1.8
million tonnes of grain at ports, leaving traders facing heavy
losses from the prospect of selling onto a weaker domestic
Most-active CBOT corn ended up 28-1/4 cents to
$8.09-1/2 a bushel, while soybeans settled up 10 cents at
$16.56-1/2 a bushel.
Given India's ban, traders will be scrutinizing weekly U.S.
crop data later on Monday for an update on wheat conditions and
progress in corn and soybean planting, which has been delayed by
cool, wet weather.
"I'm watching it like a hawk," said Jack Scoville, market
analyst at The Price Futures Group. "We need every bushel of
yield we can manage this year."
(Additional reporting by Enrico Dela Cruz in Manila and Gus
Trompiz in Paris; Editing by Chris Reese and Sandra Maler)