Wheat firms on short-covering, export hopes; corn, soy also jump

* Wheat, corn, soy break through key technical levels

* Hopes for improved U.S. wheat exports fuel gains

* Dry weather curbs outlook for Brazil crop production (Adds closing prices)

By Karl Plume

CHICAGO, Jan 17 (Reuters) - U.S. corn, soybean and wheat futures climbed for a second straight session on Thursday in a short-covering and technical bounce following a steep drop earlier this week.

Gains in wheat ignited the rally as hopes for a pickup in U.S. wheat export demand pushed prices through key technical levels. Corn and soybeans promptly followed and also broke through chart resistance points.

"We're still seeing some short covering after that large sell-off on Tuesday," said Tim Marsh, analyst with Summit Commodities.

Grain futures fell to multi-week lows earlier in the week on concerns about slow progress in talks to resolve the U.S.-China trade war that has slashed Chinese demand for U.S. soybeans and grains.

Markets have since been clawing back from those lows, awaiting any news of grain purchases promised by Beijing or signs that a deal to end the bitter trade fight could be reached by a March 2 deadline, when U.S. tariffs on Chinese products are due to jump.

Adverse weather in South America continued to underpin corn and soy markets. Numerous crop watchers have scaled back their harvest forecasts for Argentina and Brazil due to stressful weather.

The Buenos Aires Grains exchange cut its forecast for Argentine soybean plantings to 17.7 million hectares, from 17.9 million hectares previously, due to excessive rains.

Chicago Board of Trade March soybeans jumped 13-1/4 cents to $9.07-3/4 a bushel, breaking through chart resistance at its 20- and 50-day moving averages. The contract's 1.5-percent rise was its steepest since Nov. 28.

March corn rose 6 cents, or 1.6 percent, to $3.80 a bushel, the contract's strongest gain since Oct. 26. Buying accelerated as prices broke through chart resistance at key technical levels, including the 50- and 100-day moving averages.

CBOT March wheat was up 5-1/4 cents at $5.17-3/4 a bushel. The contract ended nearly 5 cents off its session high and settled near its 50-day moving average.

Concerns that harsh cold could threaten vulnerable wheat crops in the U.S. Plains that do not have a protective blanket of snow supported the wheat market, traders said.

Continued speculation that top wheat exporter Russia may move to curb exports also supported futures, although Moscow has not officially changed its export outlook. (Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; editing by James Dalgleish and Chizu Nomiyama)

First Published: 2019-01-17 03:53:46
Updated 2019-01-17 22:10:21

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