January 31, 2018 / 2:52 AM / 6 months ago

GRAINS-Chicago wheat rises for 6th day in longest rally since June

    * Wheat hits highest since late Sept, up 8.5 pct in six days
    * Soybeans unmoved after 2 days of gains, eyes on Argentina
    * Corn near last session's 5-month top, strong demand

    By Naveen Thukral
    SINGAPORE, Jan 31 (Reuters) - Chicago wheat futures rose for
a sixth consecutive session on Wednesday in their longest rally
since June, as concerns over poor winter crop conditions in the
United States and short-covering by investors supported prices.
    Soybeans were little changed after two days of gains with
focus on dry weather curbing yield potential in Argentina and
rains delaying harvest in Brazil. Corn gained more ground to
trade near Tuesday's highest since late August.
    "Investors seem to be buying heavily, ridding themselves off
a hefty short position," said Tobin Gorey, director of
agricultural strategy at Commonwealth Bank of Australia.
    "The buying though will peter out once that investor short
is cleared. And then the market will be left with reality of a
lot of U.S. wheat at uncompetitive prices."
    The Chicago Board of Trade most-active wheat contract
had gained 0.1 percent to $4.57-1/2 a bushel by 0227 GMT after
earlier in the session climbing to its highest since Sept. 29,
2017 at $4.58-3/4 a bushel.
    Soybeans were little changed at $10.00 a bushel, while
corn added 0.1 percent to $3.62 a bushel, not far from
last session's five-month peak of $3.62-1/4 a bushel.
    Condition ratings for winter wheat declined in January in
several southern U.S. Plains states that have been hit by
drought, including top producer Kansas, the U.S. Department of
Agriculture said on Monday.
    The government rated 14 percent of the Kansas winter wheat
crop in good to excellent condition, down from 37 percent at the
end of December and down from 51 percent in the week to Nov. 26.
    Commodity funds, which hold a sizable net short position in
grain futures, were net buyers of CBOT wheat, corn, soybean,
soymeal and soyoil futures on Tuesday, traders said.

    Concerns about dry weather in Argentina and ill-timed rains
in Brazil, where farmers are trying to harvest soybeans and
plant winter corn, are fuelling in futures. Brazil is the
world's top soybean exporter and No. 2 corn supplier, while
Argentina leads the globe in soymeal and soyoil exports.
    Argentina's corn crop will suffer yield losses due to
drought this year and the estimated planting area may drop
further because dry weather in the northern part of the country
has blocked late-season planting, a top Agriculture Ministry
official said.
    Below-normal rainfall and above-normal temperatures are
expected for Argentina and southern Brazil over the next 10
days, Radiant Solutions Meteorologist Kyle Tapley said in a note
to clients.

 Grains prices at 0227 GMT
 Contract    Last     Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  457.50   0.25     +0.05%   +3.74%       428.98  80
 CBOT corn   362.00   0.50     +0.14%   +1.54%       351.67  76
 CBOT soy    1000.00  -0.25    -0.02%   +1.47%       971.78  78
 CBOT rice   12.30    -$0.11   -0.89%   -0.28%       $12.03  62
 WTI crude   63.86    -$0.64   -0.99%   -3.45%       $61.94  47
 Euro/dlr    $1.241   -$0.001  -0.10%   +0.10%               
 USD/AUD     0.8060   -0.005   -0.60%   +0.40%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential
 (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)
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