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GRAINS-Wheat, corn ease further after fund-fuelled rally

(Updates prices, adds quotes, changes byline, dateline;
previous PARIS/SINGAPORE)
By Julie Ingwersen
CHICAGO, Feb 17 (Reuters) - U.S. wheat and corn futures fell
on Friday for a second straight session as traders liquidated
long positions ahead of a U.S. holiday weekend, and following a
fund-driven rally seen as lacking fundamental drivers, analysts
said.
Soybeans also extended losses from Thursday, pressured by
falling vegetable oil prices in Asia and an advancing soybean
harvest in Brazil.
As of 12:03 p.m. CST (1803 GMT), Chicago Board of Trade
March wheat was down 2-1/2 cents at $4.45-1/4 per bushel.
March corn was down 3-1/4 cents at $3.70-1/4 a bushel and
March soybeans were down 7-3/4 cents at $10.36 a bushel.
Wheat and corn closed poorly a day earlier, reversing to the
downside after the March contracts in both markets set
multi-month highs.
That bearish technical signal came after a run-up in open
interest in CBOT corn futures, indicating an influx of new long
positions that left the market vulnerable to long liquidation.
"This is just follow-through liquidation," said Tom Fritz, a
partner at EFG Group in Chicago, adding, "The spec got too long,
too fast."
The U.S. Commodity Futures Trading Commission was set to
release its weekly Commitments of Traders report later on
Friday, which will show funds' net positions in major
commodities.
Traders await fresh U.S. acreage forecasts from the U.S.
Department of Agriculture's annual outlook forum next week.
Preliminary forecasts released by the USDA in November projected
a drop in U.S. corn plantings for 2017 and an increase in
soybean acreage.
"Fundamentally, the grain setback makes plenty of sense,
with no real impetus for corn especially to continue its
unexpected rally, other than just to keep up with beans in the
2017 U.S. acreage fight," brokerage INTL FCStone said in a note
to clients.
The wheat market will get an indication of international
demand in a tender being held on Friday by Egypt. U.S. wheat was
among the origins offered, but was not expected to rival cheaper
bids of Black Sea wheat in the ongoing tender.

CBOT prices as of 12:02 p.m. CST (1802 GMT):
Net Pct Volume
Last change change
CBOT wheat WH7 445.50 -2.25 -0.5 49455
CBOT corn CH7 370.25 -3.25 -0.9 132381
CBOT soybeans SH7 1035.00 -8.75 -0.8 108614
CBOT soymeal SMH7 340.20 -1.80 -0.5 37172
CBOT soyoil BOH7 32.96 -0.56 -1.7 65549
NOTE: CBOT March wheat, corn and soybeans shown in cents per
bushel, soymeal in dollars per short ton and soyoil in cents per
lb.

(Additinoal reporting by Naveen Thukral in Singapore and Gus
Trompiz in Paris; Editing by Mark Potter and Grant McCool)

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