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GRAINS-Corn rises from 3-year low on short-covering

* Corn gains, wheat falls as traders unwind spreads
    * Soy down on long liquidation, product spread unwinding

 (Updates with closing prices, fund buying and selling totals)
    By Karl Plume
    CHICAGO, Oct 15 (Reuters) - U.S. corn futures jumped more
than 1 percent on Tuesday on bargain buying and short-covering
after prices for the feed grain hit three-year lows this week.
    Wheat futures retreated as investors unwound wheat/corn
spreads and as an expected move by India to lower wheat export
prices threatened to blunt demand for U.S. grain on the global
market. Soybeans dipped despite stronger-than-expected export shipments last week as traders unwound soymeal/soyoil spreads and liquidated longs amid an advancing U.S. harvest. "Most of what I'm seeing today is spread trade. There's a pretty strong reversal in the wheat/corn spread and I'm wondering if it's not because India is looking to lower their (wheat) export price," said Mike Zuzolo, president of Global Commodity Analytics. "The weakness in the meal/oil spread is weighing on soybeans today even though we had bean export inspections higher than the average trade guess," he said. Scattered rains across the Midwest stalled the corn and soybean harvest in some areas. But an extended period of dry weather beginning midweek and continuing into at least next week should allow farmers to resume harvesting a bumper soybean crop and a likely record-large corn crop. Chicago Board of Trade December corn futures rose 6-1/2 cents to $4.43-1/2 per bushel after hitting a 37-month low of $4.32 a day earlier. The day's 1.4 percent gain was the strongest in a month. The lowest prices in three years reignited demand from Chinese buyers who recently booked a large volume of U.S. corn
for import early next year, according to traders. CBOT December wheat fell 6-3/4 cents, or 0.9 percent, to $6.85-3/4 a bushel. The steepest decline in 3-1/2 weeks was the spot contract's fifth drop in six sessions. The spread between wheat and corn, which ballooned to a multi-year high of $2.59 last week, narrowed by more than 13 cents. News that India may lower its floor price for wheat exports by about $40 per tonne to spur sales from its ample stocks added pressure. CBOT November soybeans shed 6 cents, or 0.5 percent, to $12.67 a bushel, holding just above Monday's 20-month low of $12.61-3/4 a bushel. Futures pared earlier losses as the National Oilseed Processors Association (NOPA) reported September crushings above analyst forecasts and as export inspections topped forecasts. NOPA said the U.S. soybean crush fell to a four-year low of 108.68 million bushels in September, down nearly 2 million bushels from August but more than 2 million bushels above trade forecasts. Commodity funds bought an estimated net 8,000 corn contracts on the day and sold a net 3,000 contracts each of soybeans and wheat, trade sources said. Prices at 2:02 p.m. CDT (1901 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 443.50 6.50 1.5% -36.5% CBOT soy 1267.00 -6.00 -0.5% -10.7% CBOT meal 423.20 0.00 0.0% 0.6% CBOT soyoil 40.19 0.00 0.0% -18.2%
CBOT wheat 685.75 -6.75 -1.0% -11.9% CBOT rice 1548.00 32.50 2.1% 4.2% EU wheat 199.75 1.00 0.5% -20.2% US crude 101.10 -1.31 -1.3% 10.1% Dow Jones 15,202 -100 -0.7% 16.0% Gold 1285.41 12.62 1.0% -23.2% Euro/dollar 1.3518 -0.0044 -0.3% 2.5% Dollar Index 80.4860 0.2230 0.3% 0.9% (Additional reporting by Colin Packham in Sydney, Muriel Boselli in Paris; Editing by Phil Berlowitz and Krista Hughes)

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