GRAINS-Short-covering fuels rally in U.S. corn, soybeans, wheat

* Traders evening up ahead of Friday's USDA report
    * Soybeans also supported by tight U.S. supply
    * Corn rallies even as planting gains momentum

 (Recasts, updates with closing prices, adds new analyst quote)
    By Mark Weinraub
    CHICAGO, May 9 (Reuters) - U.S. grains and soybeans rallied
on Thursday, with soybeans touching their highest level in
nearly two months, as traders covered short positions ahead of a
monthly U.S. Agriculture Department report.
    Wheat and corn notched the biggest gains, surging 2.5
percent, but the bullish tone supported the entire agricultural
    "This looks like a short-covering rally in front of
tomorrow's USDA report," said Chris Robinson, senior trader at Top Third Ag Marketing. "Nobody is expecting a lot of fireworks out of it but you just never know. We are just evening up in front of the number." Corn rose even as planters rolled across the U.S. Midwest, allowing many farmers to make their best progress of the weather-delayed seeding season. A firmer cash market - basis values were trending near record levels at soybean processors - provided a pillar of support to futures prices. Better-than-expected export demand added additional strength to soybeans. "What this boils down to is just tight supplies," said Dewey Strickler, president of Ag Watch Market Advisors, a grain industry consultancy. The most-active Chicago Board of Trade July soybean contract settled up 18 cents at $14.08-3/4 a bushel. Prices briefly passed through their 100-day moving average and settled above that key technical point for the first time since March 27. The May soybean contract, which is in its delivery period, was up 12-1/4 cents at $14.91-1/4 a bushel and hit its highest level since March 12. USDA said early Thursday that old-crop soybean export sales totaled 193,800 tonnes in the latest reporting week, topping
market forecasts for zero to 100,000 tonnes. CBOT July soft red winter wheat was 17-1/2 cents higher at $7.23-1/2 a bushel. Analysts expect the USDA report on Friday to show that 2013 U.S. winter wheat production will fall 9 percent from a year ago in its first official estimate of the 2013 crop. "Private estimates ... continue to point to a significant tightening in U.S. hard red winter and hard red spring wheat supplies in 2013/14," said Luke Mathews, analyst at Commonwealth Bank of Australia. "This will help pull total wheat supplies lower in the year ahead, providing price support to the complex," CBOT July corn was 15-3/4 cents higher at $6.48-3/4 a bushel. Some planting was taking place in the U.S. Midwest this week, which has been drenched by heavy rain that kept farmers sidelined throughout April and early May. Full-scale seeding was expected over the weekend but another round of showers could stall farmers again next week. "The 11- to 15-day forecast leans wetter as well and will cause widespread interruptions to seeding in the Midwest," Commodity Weather Group meteorologist Joel Widenor said. Prices at 1:36 p.m. CDT (1836 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 694.50 19.50 2.9% 7.4% CBOT soy 1491.25 12.25 0.8% 24.4% CBOT meal 440.10 14.80 3.5% 42.2% CBOT soyoil 49.07 0.41 0.8% -5.8%
CBOT wheat 716.25 19.50 2.8% 9.7% CBOT rice 1528.50 21.00 1.4% 4.7% EU wheat 245.25 3.00 1.2% 21.1% US crude 96.18 -0.45 -0.5% -2.7% Dow Jones 15,123 18 0.1% 23.8% Gold 1461.79 -10.40 -0.7% -6.5% Euro/dollar 1.3029 -0.0122 -0.9% 0.6% Dollar Index 82.7250 0.8290 1.0% 3.2% Baltic Freight 889 -3 -0.3% -48.8% (Additional reporting by Colin Packham in Sydney; editing by Sofina Mirza-Reid and Jim Marshall)

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