* CBOT wheat hits 5-1/2 week high on global crop concerns
* Soy down on worries of wilting export interest
* Trading volumes thin ahead of USDA report
(Recasts; adds new analyst quote, updates prices, changes
byline, dateline, pvs LONDON;)
By Mark Weinraub
CHICAGO, Nov 8 (Reuters) - U.S. wheat futures rose for the
fourth day in a row Thursday, briefly breaking above $9 a
bushel, as traders staked out positions ahead of a government
report expected to show tightening global supplies.
Soybean futures fell, pressured by declining export demand,
and pulled corn prices lower, traders said.
The market's focus remained on wheat as expectations of
smaller crops in places like Argentina and Australia, coupled
with dry conditions in key growing areas of the U.S. Plains,
provided support to a commodity that has been stuck in a narrow
trading range for months.
Wheat bulls were hopeful that problems with the crop
overseas could boost demand for U.S. supplies on the export
market.
"Kansas, Colorado and Nebraska are dry and global wheat
stocks are falling. At some point this winter wheat business is
going to shift back to the U.S. That time is getting pretty
close," a wheat trader on the floor of the Chicago Board of
Trade said.
At 11:31 a.m. CDT (1731 GMT) CBOT December soft red winter
wheat futures were up 3-3/4 cents at $8.97-3/4 a bushel.
Prices peaked at $9.03-1/4, their first time above $9 a bushel
since Oct. 1.
CBOT wheat has risen 3.8 percent so far this week, its
biggest four-day rally since August.
January soybean futures were 9 cents lower at $14.98 a
bushel. CBOT December corn dropped 2 cents to $7.42-1/4 a
bushel.
The U.S. Agriculture Department said early on Thursday that
weekly export sales of soybeans were at their lowest point in 16
months. Net soybean export sales of 191,900 tonnes were well
below forecasts for 600,000 to 800,000 tonnes and included a
cancellation of 545,600 tonnes from an unknown country.
"Cancellations in export sales in soybeans certainly will
not go unnoticed," said Greg Wagner, president of GWX - Ag
Advisors. "It begs the questions as to whether or not the
market's poor price performance ... might in fact partly reflect
a nervousness regarding future cancellations."
A firm dollar, which makes investors less likely to stock
their portfolios with risky assets such as grains and reduces
the need to buy commodities as a hedge against inflation, added
further pressure on corn and soybeans.
Volume was light ahead of the release of USDA's monthly
supply and demand report on Friday.
Analysts expect the government will boost its forecast for
U.S. corn and soybean yields. Field reports from harvest
indicate the damage from the worst drought to hit the Midwest in
more than 50 years was not as bad as initially feared.
USDA also was seen cutting its global wheat stocks forecast
for the second month in a row due to weather-related problems in
key growing areas such as Ukraine, Australia and Argentina.
"We have seen cash wheat markets strengthen because of
quality concerns in Australia, Brazil and Argentina," said Brett
Cooper, a senior markets manager at INTL FCStone Australia.
"There is a view that these quality issues in the southern
hemisphere will switch demand to the United States."
Australia, the world's second-largest wheat exporter, is
expecting a much smaller crop this year, with early harvest
showing lower protein scales and poor yields. Traders said rains
forecast over the nation's east coast could slow the harvest.
Asia's top buyers, who rely on Australia for the bulk of
their milling wheat supplies, may be forced to import larger
volumes of high-protein spring wheat from the United States and
Canada.
Prices at 11:33 a.m. CST (1733 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 742.25 -2.00 -0.3% 14.8%
CBOT soy 1502.00 -6.75 -0.5% 25.3%
CBOT meal 464.70 -4.80 -1.0% 50.2%
CBOT soyoil 48.69 0.07 0.1% -6.5%
CBOT wheat 898.75 4.75 0.5% 37.7%
EU wheat 278.50 2.50 0.9% 37.5%
US crude 84.97 0.53 0.6% -14.0%
Dow Jones 12,893 -40 -0.3% 5.5%
Gold 1722.31 6.00 0.3% 10.1%
Euro/dollar 1.2744 -0.0026 -0.2% -1.6%
Dollar Index 80.8550 0.0960 0.1% 0.8%
Baltic Freight 916 0 0.0% -47.3%
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 Sam Nelson in Chicago, Naveen Thukral
in Singapore, Gus Trompiz in Paris and Nigel Hunt in London;
Editing by Maureen Bavdek and John Wallace)
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