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Wheat prices hit 6-mth high on US weather, short-covering

Chicago wheat futures rose for a third session on Thursday to hit a six-month high, buoyed as dry weather threatens U.S. winter crop yields and as investors cover short positions.

Soybean prices ticked higher, while corn eased ahead of a key U.S. Department of Agriculture report due later in the day.

The Chicago Board of Trade most-active wheat contract had gained 0.5 percent to $4.62-3/4 a bushel by 0259 GMT, after earlier marking its highest since Aug. 8 at $4.64-1/2 a bushel.

Wheat has risen 5.3 percent in three sessions.

Soybeans gained 0.1 percent to $9.84 a bushel, while corn slid 0.1 percent to $3.65 a bushel.

“There are issues with the U.S. wheat crop, but we think these gains are more to do with shorts covering positions,” said one Singapore-based trader.

“As far as global supplies are concerned, there is no real threat as of now.”

Wheat prices climbed amid concern about dry weather for the U.S. crop. While the 2018 crop is still in its winter dormancy, soil moisture is in tight supply and monthly crop ratings fell sharply in January.

World wheat supplies are abundant following bumper production in some of the key exporting countries, including Russia. But demand continues to remain strong.

France exported 792,000 tonnes of soft wheat outside the European Union in December, the largest monthly volume so far in the 2017/18 marketing year, customs data showed on Wednesday.

The USDA will issue its latest world supply and demand reports at 1700 GMT. Analysts surveyed by Reuters on average expect the USDA to raise its forecast of U.S. 2017/18 soybean ending stocks, reflecting a sluggish export pace.

There are concerns over grain and oilseed supplies from Argentina, a leading exporter of farm goods.

A strike by Argentine truck owners aimed at forcing an increase in hauling rates has halted grains unloading at some of the country’s terminals, Guillermo Wade, manager of the Chamber of Port and Maritime Activities, said on Wednesday.

Commodity funds were net buyers of CBOT corn, wheat and soymeal futures on Wednesday and net sellers of soybeans and soyoil, traders said. Trade estimates of net fund buying in corn ranged from 10,000 to 22,000 contracts, and in wheat from 7,000 to 15,000 contracts.

Source: Reuters (Reporting by Naveen Thukral Editing by Joseph Radford)

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