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CORRECTED-GRAINS-Wheat retreats from 5-year high; dryness limits decline

(Corrects headline, first paragraph and first bullet to show wheat on Tuesday hit a 5-year high not 5-1/2-year high)

SYDNEY, Oct 7 (Reuters) - Chicago wheat futures on Wednesday retreated from a more than five-year high hit in the previous session, although losses were limited by concerns that dry weather could curb U.S. crop yields.

FUNDAMENTALS

* The most active wheat futures on the Chicago Board Of Trade were trading at $8.81-3/4 a bushel, having closed up 1.5% on Tuesday when prices hit a June 2015 high of $6.01-3/4 a bushel.

* The most active soybean futures were up 0.24% at $16.73-1/2 a bushel, having firmed 2.2% on Tuesday when prices hit $10.53-3/4 a bushel, their highest since May 2018.

* The most active corn futures were up 0.36% at $7.53-3/4, having gained 1.5% in the previous session when prices hit their highest in more than eight months.

* The dry conditions in South America could boost already-robust demand for U.S. supplies as farmers in Brazil struggle to plant in the parched soils.

* The U.S. soybean harvest was 38% complete as of Sunday, the U.S. Department of Agriculture said in a weekly crop progress report on Monday, ahead of the five-year average of 28% and the average estimate in a Reuters analyst poll of 36%.

* A lack of rain in the coming days should further delay Brazil’s planting, consulting firm AgRural said on Monday.

* The U.S. corn crop was 25% harvested, the USDA said, just ahead of the five-year average of 24%, though behind the average analyst estimate of 26%.

MARKET NEWS

* The dollar held on to gains against most currencies on Wednesday after Republican U.S. President Donald Trump’s abrupt cancelling of talks on economic stimulus with Democrats increased risk aversion.

* Oil prices slipped on Wednesday after U.S. President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected build-up in U.S. crude stocks.

Asian stocks were set to open lower on Wednesday, weighed by a weaker Wall Street finish after U.S. President Donald Trump’s decision on stimulus talks.

Reporting by Colin Packham, Editing by Sherry Jacob-Phillips

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