GRAINS-U.S. soybeans hit record high as demand remains firm

* Soybeans rally to all-time high of $17.80-3/4
* Corn, wheat dip on profit-taking
* Waiting for word on whether Russia will curb exports

By Mark Weinraub
CHICAGO, Aug 30 (Reuters) - U.S. soybeans rose to a record
high on Thursday on a round of technical buying and concerns
that harvest of the drought-ravaged crop will not meet lowered
expectations, traders said.
Corn and wheat closed lower on some mild profit taking on
strong gains earlier this week. But the declines were limited as
few investors were eager to stake new positions ahead of the
U.S. Labor Day weekend.
Soybeans' move to a new high of $17.80-3/4 during Thursday's
session showed the summer-long bull market had not ended and
demand remained firm for soybeans at current price levels.
"The market is recognizing that we have another crop in this
country with low production numbers," said Nicole Thomas,
analyst with McKeany-Flavell. "It seems like its one of those
markets where you ... need to take it up another 50 cents to
$1.00 before you see some significant rationing. Arguably, it
has got a little more strength to it."
Trend-line analysis of soybean charts indicated that prices
could reach as high as $18.14 a bushel before soy harvest kicks
into gear in the Midwest, said Ted Seifried, senior market
analyst with the Zaner Group. Prices typically peak just before
combines start to roll.
"From a technical level, it looks like soybeans still have a
little bit more left in the tank," Seifried said. "We could be
two or three weeks away from putting a high in. We are in
uncharted territory."
Chicago Board of Trade November soybeans settled up
10-1/2 cents at $17.63-1/2 a bushel. December wheat futures
fell 2-3/4 cents to $9.03 bushel. CBOT December corn
ended 5 cents lower at $8.08-1/2 a bushel.
Traders were closely watching weather forecasts as expected
storms could further harm the drought ravaged corn crop.
"They do not know how much damage the heavy rains may
cause," said Mike Zuzolo, president of Global Commodity
Analytics & Consulting in Lafayette, Indiana.
"The trade is taking a cautious approach ahead of the
remnants of (Hurricane) Isaac."
Torrential rain and wind from Isaac likely harmed some rice,
cotton, soybean and sugarcane crops in the Deep South, but the
rains will also bring relief to farmers struggling with the
worst drought in more than 50 years, an agricultural
meteorologist said on Thursday.
"The deficits are so great that it will take up to 10 or 15
inches of rain over a longer period of time to replenish soil
moisture supplies," said Andy Karst, meteorologist for World
Weather Inc. "However, this will help and it will bring some
rivers back up and help speed up barge traffic."
Two to 4 inches (5 to 10 cm) of rain can be expected in
portions of the central Midwest through the weekend, Karst
added, which could delay harvest in those areas.
Flooded fields could harm the crops as they near harvest.
Additionally, high winds could knock down corn in fields, a
particular concern due to poor stalk development during the
drought.
Soybeans garnered additional support from signs that
exporters have not begun to ration their demand despite the high
prices and expectations for a small U.S. harvest.
The U.S. Agriculture Department said weekly export sales of
soybeans totaled 721,400 tonnes, near the high end of forecasts
for 600,000 to 800,000 tonnes. Wheat exports also came in line
with expectations, but export sales of corn dropped below market
forecasts.
Traders also awaited word on whether Russia will curb grain
exports as drought has cut harvest expectations below 2010
levels. A punitive tax on exports is a likely option as soon as
October, according to a survey of international grain traders
conducted by Reuters.
SovEcon agricultural analysts on Thursday cut their forecast
for Russia's 2012 wheat crop to 38 million tonnes, from a
previous estimate of 39 million, to reflect deterioration of
yields in a widespread drought.
Prices at 2:39 p.m. CDT (1939 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 811.50 1.25 0.2% 25.5%
CBOT soy 1770.25 7.00 0.4% 47.7%
CBOT meal 548.10 4.80 0.9% 77.1%
CBOT soyoil 56.59 -0.05 -0.1% 8.6%
CBOT wheat 883.50 -2.00 -0.2% 35.4%
CBOT rice 1503.50 -19.00 -1.3% 2.9%
EU wheat 266.75 1.75 0.7% 31.7%

US crude 94.81 -0.68 -0.7% -4.1%
Dow Jones 13,031 -77 -0.6% 6.7%
Gold 1657.00 1.06 0.1% 6.0%
Euro/dollar 1.2513 -0.0016 -0.1% -3.3%
Dollar Index 81.6540 0.1050 0.1% 1.8%
Baltic Freight 707 -11 -1.5% -59.3%

In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel,
rice per hundredweight, soymeal per ton and soyoil per lb.

(Additional reporting by Sam Nelson; Editing by John Wallace,
Dale Hudson and David Gregorio)