GRAINS-Soy set for biggest weekly gain in three months

* Soybeans up on dry Argentina weather

* Corn also supported by Argentina risks, wheat by short-covering

* High global grain supplies cap gains

(Updates with European trading, changes byline/dateline) PARIS/SINGAPORE, Jan 19 (Reuters) - Chicago soybean futures rose for a fifth straight session on Friday, putting them on course for the biggest weekly gain in three months as the market focused on the risk of dry weather damaging crops in Argentina. Wheat gained for a third session in a row as short-covering and an easing dollar underpinned the market. Corn also edged higher. The Chicago Board of Trade's most-active soybean contract was up 0.3 percent at $9.75-3/4 a bushel after touching a two-week high of $9.76-1/4. Over the week it was up 1.6 percent, the largest gain since mid-October. Persisting dryness in Argentina has raised concern about harvest prospects in the world's third-largest soybean producer. "The weather in South America is playing a big part in supporting prices," said Graydon Chong, senior commodity analyst at Rabobank. "It's certainly a concern, given that Argentina is the biggest soymeal exporter and we see soymeal prices leading the soy complex." CBOT soymeal hit a one-month high on Friday at $329.8 a tonne, also up for a fifth day running. The Buenos Aires Grain Exchange could reduce its 2017/18 soybean planting area estimate further after sowing delays caused by dry weather in the northwestern part of Argentina, it said on Thursday. Dry conditions have also raised concern about Argentina's corn crop and analysts said this week that drought could cut up to 3.7 million tonnes from the projected 2017/18 harvest. However, ample global supplies of cereals and oilseeds were limiting market reaction to weather risks such as the drought in Argentina or cold, dry conditions in U.S. growing belts. "Argentina is a supply risk but we have seen these concerns come and go," said Phin Ziebell, agribusiness economist at National Australia Bank. "Global soybean inventory is pretty high." CBOT wheat was up 0.2 percent at $4.26-1/4, set for a weekly rise after steep losses the previous week. Corn gained 0.4 percent to $3.52-3/4 but held below Thursday's two-week high. The International Grains Council (IGC) on Thursday raised its forecast for global wheat production in the 2017/18 season but said global stocks in 2018/19 could decline for the first time in six years. The IGC also raised its forecast for 2017/18 global corn output by 14 million tonnes to 1.054 billion tonnes. Wheat has been supported this week by expectations that recent price lows will stir export demand. Grain markets will get an indication from weekly U.S. export sales data due at 1330 GMT.

Prices at 1031 GMT

Last Change Pct End Ytd Pct Move 2017 Move CBOT wheat 426.25 1.00 0.24 427.00 -0.18 CBOT corn 352.75 1.25 0.36 350.75 0.57 CBOT soy 975.75 2.75 0.28 961.75 1.46 Paris wheat Mar 155.75 0.00 0.00 159.00 -2.04 Paris maize Mar 152.75 1.25 0.83 157.75 -3.17 Paris rape Feb 344.25 -0.50 -0.15 347.75 -1.01 WTI crude oil 63.49 -0.46 -0.72 60.42 5.08 Euro/dlr 1.23 0.00 0.36

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Naveen Thukral; Editing by Sunil Nair and David Goodman)