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GRAINS-Wheat eases for 4th session, soybeans pare earlier gains

* Wheat at 2-week low on surprise increase in Canadian
output
* Soybeans pare gains after hitting 4-month high on Tuesday

(Updates prices, adds quote, changes dateline/byline)
By Naveen Thukral and Sybille de La Hamaide
SINGAPORE/PARIS, Dec 7 (Reuters) - Chicago wheat futures
slid for a fourth consecutive session on Thursday, hitting the
lowest in more than two weeks as abundant supplies weighed on
the market, with the latest data from Canada showing higher than
expected production.
Chicago soybeans pared gains scored earlier in the week due
to concerns over dryness in Argentina, as traders booked profits
in late-year adjustments and corn edged lower.
The decline in wheat was unsurprising given slow U.S.
exports, said Tobin Gorey, director of agricultural strategy at
Commonwealth Bank of Australia.
"The catalyst seems to have been a higher estimate of
Canada's wheat crop by the local official statistician," he
said. "The estimate was the best part of 10 percent higher than
where analysts were pegging the number, so it was a big shock."
Canadian farmers harvested larger crops than expected this
autumn, reaping record-large canola output and a surprisingly
big wheat crop, a Statistics Canada report showed on Wednesday.

Canola production topped 21.3 million tonnes, 8 percent
higher than Statscan's September estimate. The all-wheat harvest
at 30 million tonnes exceeded Statscan's previous estimate by
10.5 percent.
The Chicago Board of Trade most-active wheat contract
was 0.1 percent higher at $4.25-1/2 a bushel after dropping
earlier to $4.23-1/2 a bushel, the weakest since Nov. 21.
Soybeans fell 0.7 percent to $9.95-1/2 a bushel. It
had hit a four-month high of $10.15 a bushel on Tuesday. Corn
was 0.2 percent lower at $3.52 per bushel.
Despite a recent rise in soybean prices, there was little
upside potential for gains next year, Commerzbank said.
"The supply of soybeans will keep pace with the growing
demand in China thanks to a record crop in the U.S. and only
slightly lower crops in South America," it said in its outlook
for 2018.
"The global soybean market is likely to show a small surplus
in 2017/18, meaning that the stocks-to-use ratio will fall only
marginally short of the previous year's record level."
Worries about dry weather in Argentina, one of the world's
top exporters of soybeans and corn and the No. 1 global supplier
of soymeal livestock feed and soyoil, had propelled soybeans
higher.
Production of corn-based ethanol hit record rates of 1.108
million barrels a day, according to the U.S. Energy Information
Administration, underlining robust demand for corn.
Commodity funds were net sellers of CBOT soybean, soymeal,
wheat, corn and soyoil futures contracts on Wednesday, traders
said.

Prices at 1205 GMT
Last Change Pct End Ytd
Move 2016 Pct
Move
CBOT wheat Mar 425.50 0.25 0.06 408.00 4.29
CBOT corn Mar 352.00 -0.75 -0.21 352.00 0.00
CBOT soy Mar 995.50 -7.25 -0.72 1004.00 -0.85
Paris wheat Mar 160.50 -0.75 -0.47 177.50 -9.58
Paris maize Jan 153.25 -1.00 -0.65 166.00 -7.68
Paris rape Feb 364.50 -2.00 -0.55 380.25 -4.14
WTI crude oil 56.21 0.25 0.45 53.72 4.64
Euro/dlr 1.18 0.00 -0.07
Most active contracts - Wheat, corn and soy US cents/bushel,
Paris futures in euros per tonne

(Reporting by Naveen Thukral; editing by Richard Pullin and
David Evans)

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