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GRAINS-Wheat dips after hitting 6-month high on dry U.S. weather

* Markets slip after sharp rises on Monday
* Dry weather threatens U.S. wheat belts
* Argentine dryness endangers soybeans

(Recasts with price falls in European trade, adds comment, changes dateline)
By Michael Hogan
HAMBURG, Feb 13 (Reuters) - Chicago wheat futures slipped on Tuesday on
profit-taking after hitting a six-month high as dry weather in U.S. grain belts
stoked fears of possible crop damage.
"Markets are seeing a pullback today with some selling pressure after their
strong rises on Monday caused by concern about dry weather in parts of the
United States and Argentina," said Graydon Chong, senior commodity analyst with
The Chicago Board of Trade most active March wheat was down 0.6
percent at $4.61 a bushel at 1124 GMT, after earlier touching at $4.67-1/4 a
bushel, the highest for the most active wheat contract since Aug. 8.
Wheat closed up 3.4 percent on Monday on fears dryness in the U.S. Plains
grain belt could stress wheat crops there.
March soybeans fell 0.1 percent to $10.00-1/4 a bushel. Soybeans
firmed 1.9 percent on Monday when they closed above $10 a bushel for the first
time since Dec. 6. March corn fell 0.2 percent to $3.66-1/4 a bushel after
rising 1.3 percent on Monday.
"On wheat, close attention is being given to weather in the U.S. Plains,
although there is not necessarily a high correlation between U.S. winter wheat
crop conditions at this time of the year and the final U.S. wheat crop," Chong
said. "There is a long time to go in crop development but if dryness in the U.S.
persists for the next month or so we could see wheat continued to be well
"However, global wheat stockpiles are robustly large and there are more
hopes for snow in parts of the U.S. Midwest, which could potentially provide
additional moisture."
Dryness in Argentina, the world's largest soymeal exporter caused soybeans
and soymeal to rally on Monday.
"There is some selling in soybeans today but I think markets will hold
around current levels because of expectations the Argentine crop is set to
suffer from more dry weather," Chong said. "Soymeal has risen by around 10
percent in past weeks and we could see meal trading in a new range of between
$360 to $365 a ton if it continues to remain dry in Argentina."
Soymeal on Tuesday rose 0.1 percent to $357.80 a ton, hovering around
its highest since July 2016 for the most active contract, supported by
expectations Argentina might have less to export if its soybean crop is reduced.
"Corn has been more of a passenger, pushed higher by the soybean strength.
Corn prices are generally below the cost of production which could change
planting, with analysts starting to reduce forecasts of Brazil's corn crop,"
Chong said.

Grains prices at 1124 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 461.50 -2.50 -0.54% +2.78% 438.59 61
CBOT corn 366.25 -0.75 -0.20% +1.17% 355.97 63
CBOT soy 1000.25 -1.50 -0.15% +1.75% 978.62 63
CBOT rice $12.38 -$0.01 -0.08% +0.45% $12.17 55
WTI crude $59.25 -$0.04 -0.07% +0.08% $63.21 19
Euro/dlr $1.235
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential

(Reporting by Michael Hogan, additional reporting by Colin Packham, editing by
David Evans)

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