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GRAINS-Soybeans near 2018 high as U.S. cuts supply forecast; corn firms

* Soybeans gain more ground as U.S. supply outlook supports

* Corn futures rise for 2nd session on strong demand, wheat firms (Adds quote in paragraph 3, details of speculators positions)

SINGAPORE, Oct 12 (Reuters) - Chicago soybean futures edged higher on Monday, trading near a more than two-year peak hit in the previous session as the U.S. government’s estimate for lower supplies supported prices.

Corn rose for a second session while wheat gained ground.

“Soybean prices were lifted by a friendly new estimate from the USDA and continued worries about dry conditions in South America,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

The most-active soybean contract on the Chicago Board of Trade rose 0.2% to $10.67-1/2 a bushel by 0249 GMT, having risen to a 2018 high of $10.79-3/4 a bushel on Friday.

Corn advanced 0.5% to $3.97 a bushel and wheat gained 0.6% to $5.97-1/4 a bushel.

U.S. corn and soybean supplies will be smaller than previously forecast, as adverse weather reduced the acreage that farmers will harvest, the U.S. government said on Friday.

Soybean stocks were pegged at a five-year low, with rising exports eating into the stockpile, according to the U.S. Agriculture Department’s monthly World Agricultural Supply and Demand Estimates Report.

With U.S. soy supplies tightening, traders are increasingly turning their attention toward rival producer Brazil, where dryness has threatened plantings. Traders are also monitoring dryness that has hampered wheat plantings in the Black Sea region.

Current dry weather may reduce Russia’s winter wheat sowing area by 10-15%, mainly in the central part of the country, the Sovecon agriculture consultancy said in a note on Friday.

Large speculators raised their net long position in CBOT corn futures in the week to Oct. 6, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, switched to net long position in CBOT wheat and raised their net long position in soybeans. (Reporting by Naveen Thukral; Editing by Aditya Soni and Subhranshu Sahu)

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