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GRAINS-Corn declines on long liquidation, soy lower; wheat rallies

(Updates with closing U.S. prices, USDA crop progress data)

CHICAGO, Nov 2 (Reuters) - U.S. corn futures declined on Monday as funds scaled back long positions ahead of the U.S. presidential election, and forecasts called for optimal weather in the Midwest, where farmers are wrapping up the harvest of corn and soybeans, analysts said.

Wheat futures turned higher, rallying on bargain-buying after a five-session slide.

Chicago Board of Trade December corn settled down 1 cent at $3.97-1/2 per bushel. January soybeans ended down 4 cents at $10.52-1/4 a bushel while CBOT December wheat settled up 9 cents at $6.07-1/2 a bushel.

Corn was vulnerable to long liquidation after speculators had built up a massive net long position during a recent run-up in prices to a 14-month high, with sentiment buoyed by strong demand for corn from China.

“Forecasts for warm and dry weather over the Corn Belt over the next six days, which will allow producers to finish corn and soybean harvest in most areas, and the larger-than-expected net long in corn futures ... pressured corn futures,” said Dan Cekander, president of DC Analysis.

After the CBOT close, the U.S. Department of Agriculture said the U.S. corn harvest was 82% complete, ahead of the five-year average of 69%, and the soybean crop was 87% harvested, ahead of the five-year average of 83%. However, both figures fell short of the average expectations in a Reuters poll of analysts.

Improved weather for developing crops in South America also weighed on prices.

“The market has lost impetus from the shrinking areas of concern for South America crops,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Wheat futures closed higher for the first time in six sessions. Cekander noted forecasts for potentially stressful cold temperatures in wheat areas of Russia.

After the close, the USDA rated 43% of the U.S. winter wheat crop in good to excellent condition, up from 41% a week earlier but below the average estimate of 45% in a Reuters survey. (Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore, Editing by Barbara Lewis and Richard Pullin)

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