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GRAINS-Corn hovers just above 3-year low, wheat, soy edge higher

Nigel Hunt
Wednesday, 6 Nov 2013 | 8:16 AM ET

* Corn near 3-year low, analysts see scope for further losses

* Result of Egypt's tender for wheat awaited

* Strong demand helps to underpin soybean prices

(Adds details, quotes)

LONDON, Nov 6 (Reuters) - Corn futures on the Chicago Board of Trade edged higher on Wednesday as the market looked to break its recent losing streak but expectations of higher U.S. yield estimates in a report due later this week kept gains in check.

Wheat and soybeans also rose with prices more attractive to buyers following recent weakness.

"We might see some near-term support for corn as we see some of the speculators cashing out of their short positions at these lower prices but the reality is we've just had an enormous corn harvest and lower prices are likely required to find demand," Macquarie analyst Chris Gadd said.

December CBOT corn rose a marginal 0.1 percent to $4.25-1/4 a bushel by 1251 GMT, hovering just above Tuesday's low of $4.24, the weakest price since Sept 1, 2010.

Analysts said the market was weighed by belief that the U.S. Department of Agriculture is likely to raise its forecast for U.S. corn yields in a report on Friday.

A Reuters survey produced an average trade estimate of 158.9 bushels per acre, well above USDA's September forecast of 155.3 bushels.

"Expectations are that the U.S. corn yield estimates are going to be higher in the USDA report, so there is scope for prices to go down below $4 a bushel," said one Melbourne-based analyst.

TIGHT BALANCE SHEET ON WHEAT

CBOT wheat prices were also higher with December up 0.4 percent at $6.58-3/4 a bushel. The contract fell to $6.55 on Tuesday, the lowest for the front month since Sept. 24.

"There is still an underlying (bullish) story in wheatmajor exporting nation balance sheets look tight," Macquarie analyst Gadd said.

"Prices should find support at these levels, the big risk ahead is in the spring. As stocks are so tight the market will be very sensitive to weather problems with next season's crops."

November milling wheat in Paris stood 0.7 percent higher at 203.50 euros a tonne.

News was awaited on Egypt's tender for an unspecified amount of wheat for shipment Dec 1-10.

CBOT soybean prices edged up with January rising 0.2 percent to $12.52-1/4 a bushel.

"If you get a good Brazilian crop, then prices will most probably be bearish from here, but while this is not a certainty there is a risk to the upside, especially given the current strength of demand," Gadd of Macquarie said.

Dealers noted, however, USDA was expected to increase its forecast for this year's U.S. crop on Friday.

In a Reuters poll, analysts pegged 2013 U.S. soybean production at 3.221 billion bushels, up from USDA's September forecast for 3.149 billion.

(Additional reporting by Naveen Thukral in Singapore; editing by Keiron Henderson)