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GRAINS-Wheat extends gains, but easing concerns over US crop condition drag

SYDNEY, May 25 (Reuters) - U.S. wheat edged higher on Thursday to extend two-day gains to nearly 1 percent as investors covered short positions, but easing concerns about the state of U.S. crops dragged.

FUNDAMENTALS

* The most active wheat futures on the Chicago Board of Trade rose 0.23 percent to $4.33-1/2 a bushel, having closed up a touch on Wednesday.

* Wheat gains were checked though by a slight improvement in weekly winter wheat condition ratings.

* The most active soybean futures climbed 0.21 percent to $9.50-1/4 a bushel, after ending Wednesday little changed.

* The most active corn futures rose 0.27 percent to $3.72-1/4 a bushel, having gained 0.5 percent the day before.

MARKET NEWS

* The dollar was on the defensive early on Thursday after minutes of the latest Federal Reserve policy meeting were not as hawkish as anticipated, while the euro edged back up towards a 6-1/2-month high.

* Oil prices retreated slightly on Wednesday as investors reacted to a smaller-than-expected U.S. gasoline stocks draw as they awaited the outcome of discussions in Vienna between OPEC and other oil-exporting countries on whether to extend output cuts.

* U.S. stocks ended up slightly on Wednesday, with the S&P 500 hitting a record high close.

DATA AHEAD (GMT)

0830 Britain GDP 2nd release Q1 1230 U.S. Trade balance Apr 1230 U.S. Wholesale inventory Apr 1230 U.S. Weekly jobless claims

Grains prices at 0119 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 433.50 1.00 +0.23% +0.93% 433.69 60 CBOT corn 372.25 1.00 +0.27% +0.74% 369.83 58 CBOT soy 950.25 2.00 +0.21% +0.21% 963.02 43 CBOT rice 11.04 -$0.01 -0.14% +1.19% $10.25 71 WTI crude 51.75 $0.39 +0.76% +0.54% $49.27 78

Currencies

Euro/dlr $1.123 $0.001 +0.07% +0.38% USD/AUD 0.7493 -0.001 -0.12% +0.25%

Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential

(Reporting by Colin Packham; Editing by Joseph Radford)