* Wheat up 4.6 pct this week, heads for 2nd straight weekly
* Dryness in U.S. Plains, short-covering support wheat
* Corn gains 2.7 pct this week, soybeans add about half pct
(Adds details, quotes)
By Naveen Thukral
SINGAPORE, Jan 6 Chicago wheat was poised on
Friday for its biggest weekly gain in almost three months as
dryness in the U.S. Plains, short-covering and a weaker dollar
buoyed the market.
Soybeans eased for a second day, while corn was little
changed after five consecutive sessions of gains.
The Chicago Board of Trade most-active wheat contract
has climbed 4.6 percent so far this week, the most since
mid-October. Earlier in the session, it hit the highest since
Nov. 23 at $4.27-1/2 a bushel.
Soybeans have gained about half a percent this week
while corn has risen 2.7 percent, its biggest weekly gain
in a month.
"There is some upside in wheat as lower U.S. dollar and a
bit of dryness in the U.S. Plains are moving things up," said
Phin Ziebell, an agribusiness economist at National Australia
"We could see some further gains if you have persistent
dryness in the U.S. Plains, but based on the fundamentals
supplies are pretty sufficient."
The wheat market, which hit a 10-year low last year, has
found some support as investors build weather premium following
cold and dry weather in parts of the U.S. Plains.
In addition, an expected sharp fall in temperatures in
Ukraine could damage the country's winter grain crops because of
a lack of snow cover on the fields, analyst UkrAgroConsult said
Meteorologists forecast a cold snap starting on Jan. 6 and
predict that air temperatures will fall on average to 13-17
degrees Celsius below zero, perhaps even to minus 20 degrees.
Short-covering by commodity funds supported wheat. Commodity
funds were net buyers of CBOT corn and wheat futures contracts
on Thursday and net sellers of soybeans.
The dollar tottered at three-week lows against a basket of
currencies on Friday after it suffered a swift evaporation of
bullish momentum in the wake of a jump in the Chinese yuan.
Weakness in the dollar makes greenback-priced commodities
cheaper for importers holding other currencies.
Soybean prices have been weighed down by bumper harvests in
South America, although potential weather setbacks, including
heavy rain that has disrupted late planting in parts of
Argentina, have offered some support.
Argentine farmers are expected to plant 19.3 million
hectares with soybeans, the Buenos Aires Grains Exchange said on
Thursday, lowering its previous 19.6 million hectare estimate.
Grains prices at 0318 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 426.50 0.25 +0.06% +4.92% 409.53 73
CBOT corn 361.50 0.25 +0.07% +1.62% 354.67 67
CBOT soy 1009.25 -3.25 -0.32% +1.43% 1032.33 45
CBOT rice 9.75 $0.00 +0.05% +1.51% $9.81 63
WTI crude 53.74 -$0.02 -0.04% +0.90% $51.48 64
Euro/dlr $1.059 $0.018 +1.76% +1.24%
USD/AUD 0.7335 0.011 +1.54% +2.14%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per
RSI 14, exponential
(Reporting by Naveen Thukral; Editing by Subhranshu Sahu)