* CBOT wheat hits highest since late Sept before turning lower
Recent run-up fuelled by investor short covering
* CBOT corn retreats from prior session's 5-month high (Adds quotes, updates prices)
By Nigel Hunt
LONDON, Jan 31 (Reuters) - Chicago wheat futures turned lower on Wednesday as a short-covering rally linked to concerns over poor winter crop conditions in the United States ran out of steam.
The Chicago Board of Trade most-active wheat contract was down 1.0 percent at $4.52-1/2 a bushel at 1132 GMT after rising to a peak of $4.58-3/4, the highest since Sept. 29, 2017.
The market had risen in the last five sessions.
Condition ratings for winter wheat declined in January in several southern U.S. Plains states that have been hit by drought, including top producer Kansas, the U.S. Department of Agriculture said on Monday.
The government rated 14 percent of the Kansas winter wheat crop in good to excellent condition, down from 37 percent at the end of December and down from 51 percent in the week to Nov. 26.
Dealers said wheat prices had also had support from short covering by investors.
"The buying though will peter out once that investor short is cleared. And then the market will be left with the reality of a lot of U.S. wheat at uncompetitive prices," said Commonwealth Bank of Australia analyst Tobin Gorey.
Speculators had been steadily increasing a large net short position in Chicago wheat in recent weeks, a trend likely to be at least partially reversed when weekly data is issued on Friday.
"The next CFTC positioning data are likely to reveal that the very high net short positions seen in recent reporting weeks have now been reduced at least to some extent," Commerzbank said in a market note.
March milling wheat futures on Paris-based Euronext were down 1.25 euros or 0.8 percent, at 159.50 euros a tonne.
Agritel said in a market note that crop concerns in the United States contrasted with favourable conditions in western Europe and Black Sea region.
"A drop of temperatures is expected next week over all the European continent including the Black Sea. This weather evolution is not raising fears so far," Agritel said.
Corn and soybeans also fell after recent advances driven partly by concerns about dry weather in Argentina.
The most active CBOT corn contract was down 0.4 percent at $3.60 a bushel, retreating slightly from the last session's five-month peak of $3.62-1/4 a bushel.
Argentina's corn crop will suffer yield losses due to drought this year and the estimated planting area may drop further because dry weather in the northern part of the country has blocked late-season planting, a top agriculture ministry official said.
The most active CBOT soybean contract fell 0.8 percent to $9.92-1/2 a bushel. (Additional reporting by Naveen Thukral in Singapore; Editing by Subhranshu Sahu and David Evans)