GRAINS-Soybeans rise as drought withers crops in Argentina

* Argentine soy, corn crop outlook falling amid drought

* Reduced Argentine crops seen shifting demand to U.S.

* Rain in dry U.S. Plains weighs on wheat (Adds closing prices)

CHICAGO, Feb 21 (Reuters) - U.S. soybean futures on Wednesday rose for the sixth time in seven sessions on expectations that a drought-reduced crop in Argentina would buoy demand for U.S. supplies.

Gains were limited by plentiful global supplies and strong production prospects in Brazil.

Wheat slipped to a two-week low, pressured by high world supplies and rain relief for parched crops in the U.S. Plains, while corn futures ended near unchanged.

Speculative investors have shifted to a more bullish view for corn and soybeans after weeks of hot, dry weather in Argentina, the world's No. 3 exporter of both commodities and top supplier of soymeal and soyoil.

"The trade is suggesting that the coming drop in Argentine production will almost all be shifted to U.S. exports," said Rich Nelson, chief strategist with Allendale Inc.

Crop forecasters have been cutting their production forecasts for the country as corn and soy fields are expected to stay mostly dry next month.

Argentine farm consultancy Agripac cut its soybean crop forecast by about 18 percent from the start of the season and its corn crop estimate by 12 percent.

Brazil, however, is on track for a record crop. Several forecasters have ramped up their crop estimates in recent weeks amid favorable weather.

Chicago Board of Trade March soybeans were up 7-3/4 cents at $10.34-1/4 a bushel, hanging near a seven-month high of $10.39 posted a day earlier. CBOT March corn eked out a 1/4-cent gain to $3.65-3/4 a bushel after notching a near-five-month high the previous day.

Grain markets are awaiting updated supply and demand forecasts from the U.S. Department of Agriculture at its annual outlook forum later this week.

Analysts polled ahead of the gathering expect U.S. soybean acres this season to exceed corn acres for just the second time ever.

Wheat futures weakened, led by hard red winter (HRW) wheat, as a storm moved across the Southern Plains crop belt, much of which is under severe to extreme drought.

March K.C. HRW wheat futures fell 6 cents to $4.65-3/4 a bushel. CBOT March soft red winter wheat was 2 cents lower at $4.47-1/4 a bushel. Both hit two-week lows during the day's trading session.

Ample global wheat supplies and stiff competition in export markets remained headwinds for U.S. wheat. Major importer Egypt bought 120,000 tonnes of Russian wheat in its latest tender, underscoring the dominance of Black Sea origins on export markets. (Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Matthew Lewis and James Dalgleish)