* Soybeans rally as export demand tightens supplies
* Wheat to 3-month high on short covering, Ukraine jitters
* Corn sets back from 6-month top on profit-taking
* Monthly USDA supply/demand report due Monday
(Adds closing prices, analyst comment) CHICAGO, March 7 (Reuters) - Chicago Board of Trade spot soybean futures climbed to a six-month high on Friday as traders adjusted positions ahead of a monthly U.S. government report that is expected to show tighter U.S. soy stockpiles and smaller South American crops. Wheat futures hit a three-month top on follow-through technical buying after strong gains this week and jitters about political instability in Ukraine, a major corn and wheat exporter. Corn fell as investors took profit and farmers sold more of their stocks after the benchmark May contract rose above $5 a bushel for the first time since September. Oat futures, which set an all-time high this week, plunged their daily limit after the government in top exporter Canada ordered the two major rail companies to ease a massive grain backlog that has hurt farmers. CBOT May oats ended down 20 cents at $4.46-1/4 a bushel. Soybeans rose on unrelenting U.S. export sales and expectations the U.S. Department of Agriculture, in a monthly report due Monday, would raise its estimate of U.S. 2013/14 soy exports and lower its ending stocks forecast. CBOT soybeans for May delivery settled up 19-3/4 cents at $14.57-3/4 a bushel, after reaching $14.60, a life-of-contract high. The front March contract also touched $14.60, the highest spot soybean price on a continuous chart since Sept. 13. The market gained 3 percent for the week, its fifth consecutive weekly advance. Export commitments of U.S. soybeans for the 2013/14 marketing year, which began on Sept. 1, 2013, have already surpassed USDA's forecast. "The latest data shows U.S. soybean exports remain very strong and that there is a lack of significant cancellation by Chinese importers, something that is often observed as the South American crop comes online," said Luke Mathews, a commodities strategist at Commonwealth Bank of Australia. Analysts also expect the USDA to pare its estimates of the soy crops in Brazil and Argentina following poor crop weather in recent weeks.
WHEAT'S WEEKLY RISE BIGGEST IN 20 MONTHS CBOT wheat set a three-month high on continued technical buying and short covering that lifted the market by 8 percent this week, its biggest weekly gain since late July 2012. CBOT May wheat settled up 8 cents at $6.54 a bushel, after reaching $6.63. Commodity funds have been paring their net short position in CBOT wheat since February. Open interest in the market this week fell to the lowest in four years, reflecting the short covering. "We extended the life of the rally with the whole Ukraine-Russian tension," said Shawn McCambridge, grains analyst with Jefferies Bache in Chicago. "I think the fund short in Chicago has been pretty well-covered," he said, adding, "from a fundamental point of view, I think we have overdone this move."
CORN FALTERS AFTER SIX-MONTH HIGH CBOT May corn closed down 2 cents at $4.89 a bushel after reaching $5.02-1/2, its highest point since September, prompting investors to book profit. Farmers have been aggressive sellers of corn this week but country offerings slowed a bit Friday as cash basis levels in the interior Midwest tumbled in response. For the week, front-month CBOT corn rose 5 percent, the most in 10 months, buoyed by robust U.S. export sales and the crisis in Ukraine. "We have had a pretty good run and a helluva lot of fund buying since the first of the month. I think you are looking at a little bit of risk aversion," said Jim Gerlach, president of A/C Trading in Fowler, Indiana. "After a really strong week, people are taking their ball and going home," Gerlach said of Friday's market downturn.
Prices at 3:49 p.m. CST (2149 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 489.00 -2.00 -0.4% 15.9% CBOT soy 1457.75 19.75 1.4% 11.1% CBOT meal 457.80 6.90 1.5% 4.6% CBOT soyoil 44.32 -0.17 -0.4% 14.2% CBOT wheat 654.00 8.00 1.2% 8.1% CBOT rice 1531.00 2.50 0.2% -1.3% EU wheat 215.00 6.75 3.2% 2.9% US crude 102.62 1.06 1.0% 4.3% Dow Jones 16,453 31 0.2% -0.7% Gold 1339.64 -11.10 -0.8% 11.1% Euro/dollar 1.3873 0.0015 0.1% 1.6% Dollar Index 79.7100 0.0470 0.1% -0.4% Baltic Freight 1543 63 4.3% -32.2%
(Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris; editing by Jason Neely, Jeffrey Benkoe and Matthew Lewis)