GRAINS-Corn eases after surge, crop weather watched
* New-crop corn rose 3.7 pct on Thursday on weather, area worries
* New-crop soy also lower after reaching three-week high
* Dry weather, non-planted estimate, exports drove short-covering
* Market focused on weather for late-planted corn, soy crops
(Writes through after European trading, changes byline/dateline) PARIS/SINGAPORE, Aug 16 (Reuters) - Chicago corn futures eased on Friday following a jump in prices a day earlier, when forecasts for hot and dry crop weather unnerved investors who had bet on a record harvest. New-crop soybean futures also fell, coming off a three-week high, while wheat edged lower. Corn prices have had a topsy-turvy week as the market weighed less-promising crop indications against longstanding expectations for a bumper harvest. Forecasts for warmer and drier weather in the U.S. Midwest through the end of August, which will draw down soil moisture and potentially curb yields, triggered buying on Thursday by investors who had built a large short position. The corn market had rallied at the start of the week on a lower-than-expected yield forecast from the U.S. Department of Agriculture before falling back amid widespread scepticism about the USDA number. "The weather is supporting prices as memories of last year's drought are still lingering," said Joyce Liu, an investment analyst at Phillip Futures in Singapore. "This year the dry weather is coming a bit later than last year, but it could impact crops as we are still in the crucial yield-determining stage for corn and soybeans due to late planting." Chicago Board of Trade December corn eased 0.85 percent to $4.68-1/4 a bushel by 1138 GMT, after initially rising in Asian trade to set a two-week high of $4.75-3/4. November soybeans fell 0.5 percent to $12.59-1/2 a bushel, after edging up to a three-week high of $12.72 earlier on Friday. December corn is up more than 3 percent this week, recovering from four consecutive weeks of declines and on track for its biggest weekly gain since early July. November soybeans have added about 6.5 percent this week. Commodity funds bought a net 22,000 CBOT corn contracts on Thursday, trade sources said. They bought 4,000 wheat and 10,000 soybean contracts.
Corn and soy also drew impetus on Thursday from a larger-than-expected estimate of crop area that went unplanted this year, as estimated by the USDA's Farm Service Administration (FSA). But some analysts played down the area data. "We recognize that weather risks continue as the crops near maturity, but we advise caution against reading too much into the (FSA) estimates," Societe Generale analyst Christopher Narayanan said in a note. "Historically, the FSA tends to underestimate planted acreage throughout the growing season, lagging the official National Agricultural Statistics Service (NASS) figures." Soy and corn found further support in large weekly exports. The USDA pegged net U.S. soybean export sales last week at nearly 1.9 million tonnes, the highest weekly tally in 18 months. Corn export sales were well above expectations. Wheat futures, which were supported by spillover strength from corn and soybean prices on Thursday, ticked lower. Spot-month wheat fell 0.2 percent to $6.36-1/2 a bushel, while in Europe November milling wheat in Paris eased 0.8 percent to 184.25 euros a tonne. Pressure from advancing wheat harvests across the northern hemisphere was keeping international prices near their lowest levels in at least a year, offsetting brisk export demand and spillover support from corn this week.
* Prices as of 1138 GMT
Product Last Change Pct Move CBOT wheat 636.50 -1.00 -0.16 CBOT corn 468.25 -4.00 -0.85 CBOT soy 1259.50 -6.00 -0.47 Paris wheat 184.25 -1.50 -0.81 Paris maize 166.25 0.25 +0.15 Paris rape 369.25 -1.25 -0.34 WTI crude oil 107.51 0.18 +0.17 Euro/dlr 1.33 -0.04 * CBOT futures prices are in cents per bushel, Paris futures in
euros per tonne, WTI crude oil in dollars per barrel.
(Editing by Muralikumar Anantharaman and Dale Hudson)