GRAINS-Corn futures at six-week peak on snug stocks, strong cash

* Corn up for second day on dwindling supplies

* Wheat resumes advance after Cyprus-related slip

* China plans to cancel Brazilian soy orders

(Updates prices, adds details of corn cash market) CHICAGO, March 19 (Reuters) - Chicago Board of Trade (CBOT) corn futures rose 1 percent on Tuesday, the biggest one-day advance in a week, to a six-week peak on dwindling supplies of corn, slow farmer selling and firm cash basis markets. Active spot May corn futures broke above technical resistance at the 200-day moving average, reaching a session high of $7.28-3/4 per bushel, the highest for a spot contract since Feb. 6. "Corn is reflecting the tight cash situation and strong basis levels. I also think they're putting a little premium in ahead of the USDA report next week," McCambridge said. Tight supplies of U.S. corn are expected to again be confirmed when the U.S. Department of Agriculture (USDA) releases its quarterly stocks report at 11:00 a.m. CDT (1600 GMT) on Thursday, March 28. USDA also will release its prospective plantings of U.S. crops on that day. In its March supply/demand report, the USDA projected the smallest supply of corn in 17 years at the end of summer in the United States, the world's largest supplier. Cash corn spot basis bids were mostly steady to firm around the U.S. Midwest as tight supplies and slow farmer sales kept the basis at the highest levels ever for this time of year, grain merchants said. Cash corn jumped to 50 cents per bushel above benchmark CBOT May corn at a processor and ethanol plant in Cedar Rapids, Iowa, the highest point since the record basis of 55 cents last June, Reuters records showed. Wheat resumed its upward march, a day after tumbling 1.5 percent as investors liquidated long positions on concern about bank deposits in Cyprus and how a bailout in the country would affect the euro zone. Wheat's tumble on Monday also reflected profit taking after seven straight sessions of advances. "We pushed the market down to oversold conditions so there is some short-covering and profit-taking," said Shawn McCambridge, analyst for Jefferies Bache. "Also, we're seeing some export tenders show up so it looks like we've gotten down to a point to draw some business in." Soybeans turned down on liquidation and profit-taking of bull spreads following news that China, the world's largest soybean buyer, planned to cancel soy orders from Brazil. Soybean futures have fallen six trading session in a row as China moved to the sidelines, a large crop of South American soy became available to buyers and as crop weather prospects improved in the United States. CBOT May corn was up 8-1/2 cents per bushel at $7.28-1/2 per bushel, May wheat was up 9-1/4 at $7.22 and soybeans for May delivery were down 2-3/4 cents per bushel at $14.06-3/4.

CHINA'S MOVES SCRUTINIZED; EURO ZONE'S TOO Traders said the soybean market was on edge after China's leading soybean trader, the Sunrise Group, said it would cancel almost 2 million tonnes of Brazilian soybean cargoes because shipments have been delayed by severe port congestion in the South American nation, a company official said on Tuesday.

"The Chinese cancellations indicates Chinese demand is a little softer than people realized. If they really needed the beans they wouldn't have canceled," said Sterling Smith, futures specialist for Citigroup. Wheat, corn and soybean investors also were nervous a day after prices slid on a strong dollar and risk aversion on fears of financial turmoil in Cyprus and the euro zone. "Grains and beans could work lower unless there is a big breakdown in the dollar, which is doubtful given the Cyprus situation," Smith said. "People will probably keep buying the dollar and selling commodities." The dollar was higher and crude oil was lower as global markets continued to digest the potential longer-term impact of the bailout of Cyprus. Cyprus's parliament rejected a proposed levy on bank deposits as a condition for a European bailout, throwing euro zone efforts to rescue the latest casuality of the currency area's debt crisis into disarray. The chairman of euro zone finance ministers said there will be no need to impose a levy on assets in other euro zone countries. Prices at 2:21 p.m. CDT (1921 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 728.50 8.50 1.2% 12.7% CBOT soy 1406.75 -2.75 -0.2% 17.4% CBOT meal 411.60 -1.70 -0.4% 33.0% CBOT soyoil 49.48 -0.20 -0.4% -5.0% CBOT wheat 722.00 9.25 1.3% 10.6% CBOT rice 1472.00 18.00 1.2% 0.8% EU wheat 238.75 4.00 1.7% 17.9%US crude 92.26 -1.48 -1.6% -6.6% Dow Jones 14,445 -7 -0.1% 18.2% Gold 1609.45 4.70 0.3% 2.9% Euro/dollar 1.2882 -0.0072 -0.6% -0.5% Dollar Index 82.9350 0.2410 0.3% 3.4% Baltic Freight 912 13 1.5% -47.5%

(Additional reporting by Michael Hirtzer in Chicago; Editing by David Gregorio and Marguerita Choy)