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GRAINS-Wheat hits 6-mth high as dry weather threatens U.S. crop

* Wheat extends two-day gains to nearly 4 pct
* Dry weather threatens U.S. production -analysts
* Corn edges lower, soybean prices firm

By Colin Packham
SYDNEY, Feb 13 (Reuters) - U.S. wheat futures rose on
Tuesday to hit a six-month high as dry weather across a major
producing region stoked concerns about potential shortfalls in
output.
Corn edged lower, retreating after posting gains of more
than 1 percent in the previous session, while soybean prices
extended their two-day advance to 2 percent.
The most active wheat futures on the Chicago Board of Trade
were up 0.6 percent at $4.66-3/4 a bushel at 0350 GMT,
after earlier touching their highest since Aug. 8 at $4.67-1/4 a
bushel. Wheat closed up 3.3 percent on Monday.
Wheat has come under sustained pressure in recent months
amid ample global supplies, but with forecasts for continued dry
weather, traders are growing increasingly worried about
production shortfalls.
"Many, ourselves included, would be most uncomfortable about
being short now. Investors, many of whom will be like-minded,
have enough buying power to push prices higher," said Tobin
Gorey, director of agricultural strategy, Commonwealth Bank of
Australia.
The run-up in prices appeared likely to curb export demand
for U.S. wheat, a factor underscored when the U.S. Department of
Agriculture on Thursday lowered its U.S. wheat export forecast
for the 2017/18 marketing year.
The most active corn futures were down 0.1 percent at
$3.66-3/4 a bushel. They gained 1.4 percent in the previous
session.
The most active soybean futures were up 0.1 percent at
$10.02-1/4 a bushel, having firmed 1.9 percent on Monday.
Gains in soybeans were checked by concerns about Chinese
demand.
Meanwhile, some Chinese buyers have cancelled corn purchases
from the United States and switched to rival supplier Ukraine,
as Beijing tightens controls on processing genetically modified
strains of the crop, trade sources said.

Grains prices at 0350 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 466.75 2.75 +0.59% +3.95% 438.77 67
CBOT corn 366.75 -0.25 -0.07% +1.31% 355.98 63
CBOT soy 1002.25 0.50 +0.05% +1.96% 978.68 65
CBOT rice 12.38 -$0.01 -0.08% +0.45% $12.17 55
WTI crude 59.64 $0.35 +0.59% +0.74% $63.22 24
Currencies
Euro/dlr $1.229 $0.000 +0.00% +0.47%
USD/AUD 0.7866 0.001 +0.10% +0.69%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential

(Reporting by Colin Packham
Editing by Joseph Radford)

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