GRAINS-U.S. wheat up 1.4 pct; weather outlook blunts corn, soy gains

* U.S. forecasts call for cool, wet weather, aiding crop
    * Corn posts biggest monthly price drop since July 1996
    * Wheat notches longest winning streak since March

 (Updates with closing prices, adds new analyst quote)
    By Mark Weinraub
    CHICAGO, July 31 (Reuters) - U.S. wheat futures rose for the
fourth day in a row on Wednesday with bargain buyers stepping
into what traders said was a technically weak market on concerns
about production in key growing areas and a pick-up in export
    The benchmark Chicago Board of Trade September soft red
winter wheat futures contract gained 1.4 percent, its biggest daily rally since July 9. Corn and soybeans also firmed, but the gains were muted by forecasts for ideal crop weather around the U.S. Midwest during the next week. Traders also noted some end-of-month position squaring. Chicago Board of Trade corn futures fell 26.5 percent during July, their biggest monthly decline since falling 31.4 percent in July 1996. Soybeans dropped 12.2 percent this month -- their biggest monthly drop since September 2011 -- and wheat was up 2.4 percent. Traders said that wheat's monthly gain, spurred by weather concerns in the Black Sea region and rising export demand, was limited by weight from the sharp drop in the corn market. "The world balance sheet for wheat is in a precarious position," said Ken Smithmier, analyst with the Hightower Group. "With plenty of evidence to suggest additional cuts to world production and a bullish bias towards world demand, the upside for wheat looks exceptional once the market has more conviction as to the size of the U.S. corn crop." CBOT September wheat settled up 9 cents at $6.64-1/4 a bushel at 10:38 a.m. CDT (1538 GMT). The contract settled above a key technical resistance point at its 20-day moving average
for the first time since July 12. U.S. exporters were on track to surpass the U.S. Agriculture Department's projections for shipments of 1.075 billion bushels of wheat this year after recent sales to countries such as China. "We have got a little bit of demand (for wheat) going on here," said Dewey Strickler, president of Ag Watch Market Advisors, a grain industry consultancy. "If it were not for corn, wheat would be trending higher." Wheat's four straight days of gains were the longest since a seven-day rally in March. Crop forecaster Lanworth on Wednesday cut its forecast for Russian wheat production by 3 percent to 48.4 million tonnes. CBOT August soybeans were 24 cents higher at $13.74, but volume was thin as the contract was in the delivery period. The new-crop November contract was up 3-1/4 cents at $12.06-1/4 a bushel, bouncing slightly after hitting its lowest in more than three months early in the day. "I think we are seeing some bargain-buying interest in soybeans today after their price falls on Tuesday," said Saxo Bank analyst Ole Hansen. "Soybeans are still in their ranges but have been seeing recent support around the $12 level."
CBOT September corn was up 3-1/2 cents at $4.99 a bushel and new-crop December up 1-1/2 cents at $4.79 a bushel. Cool temperatures and rain around the U.S. Midwest provided a perfect setting for the corn crop as it finished pollinating. The conditions capped buying in the futures market on Wednesday. "It is still a sad state of affairs for the grains in general, and rightfully so given a corn belt forecast that's nothing short of miraculous through pollination/blooming," Matt Zeller, director of marketing information at INTL FCStone said in a note to clients. "Regardless of perfect or lasting overall rain coverage for the entire corn belt over the next week-plus, temperatures are going to hold below normal throughout, and likely hold down any rallies." Prices at 1:28 p.m. CDT (1828 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 499.00 3.50 0.7% -28.5% CBOT soy 1374.00 24.00 1.8% -3.2% CBOT meal 435.10 5.90 1.4% 3.4% CBOT soyoil 42.09 -0.02 -0.1% -14.4% CBOT wheat 664.25 9.00 1.4% -14.6% CBOT rice 1582.50 -7.00 -0.4% 6.5% EU wheat 190.00 2.50 1.3% -24.1% US crude 105.03 1.96 1.9% 14.4% Dow Jones 15,542 21 0.1% 18.6% Gold 1315.11 -11.58 -0.9% -21.5% Euro/dollar 1.3305 0.0042 0.3% 0.8% Dollar Index 81.6830 -0.1460 -0.2% 2.4% Baltic Freight 1062 -5 -0.5% 51.9% In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb. (Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Chris Reese and Sofina Mirza-Reid)

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