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CHICAGO, Nov 19 (Reuters) - U.S. wheat futures hit their highest in nearly a week on Tuesday as declining U.S. wheat condition ratings and worries about Southern Hemisphere crop prospects fueled a round of short-covering, analysts said.
Corn firmed on signs of improving export prospects while soybean futures were flat, erasing early advances.
As of 12:58 p.m. CST (1858 GMT), Chicago Board of Trade December wheat was up 6-3/4 cents at $5.14 per bushel. CBOT December corn was up 2-1/2 cents at $3.70-1/4 a bushel and January soybeans were flat at $9.10-1/4 a bushel.
Wheat posted the biggest advance on a percentage basis after the U.S. Department of Agriculture late Monday rated 52% of the U.S. winter wheat crop as good to excellent, down from 54% the previous week. Analysts on average had expected a decline of only one percentage point.
"The U.S. weather (and) the decline in ratings are helping the market out," said Terry Reilly, senior analyst with Futures International in Chicago.
Traders continue to monitor crops in Australia and Argentina, where dry weather has curbed yield prospects, Reilly noted. And commodity funds hold a net short position in CBOT wheat, leaving the market prone to short-covering rallies.
Corn futures bounced back after a two-session decline, finding support from a slow U.S. harvest pace as well as questions about plantings in Argentina, where a new president will be inaugurated next month.
Peronist Alberto Fernandez beat Argentina's business-friendly incumbent leader Mauricio Macri in an October election. The Peronist party has traditionally supported more government intervention in the economy, including higher export taxes.
"There is serious reconsideration of the size of the Argentine (corn) crop. The second-crop plantings might fall, if it's true that these rumors of tax changes will impact corn the most," Reilly said.
Signs of improving corn export demand lent support. The USDA on Tuesday said private exporters sold 191,000 tonnes of U.S. corn to unknown destinations, following sales of an additional 132,000 tonnes a day earlier.
South Korean buyers booked about 125,000 tonnes of corn in the last day, European traders said, although some was thought to be sourced from Ukraine.
"Brazil is thought to be running out of corn for export, and Argentine corn commitments are running pretty high. So there is some general feeling that some of the business is going to shift to the United States, finally," Reilly said.
The USDA on Monday said the U.S. corn harvest was 76% complete, below analysts' forecasts of 77% and well below the five-year average of 92%.
The USDA also said the U.S. soybean harvest was 91% finished, matching an average of trade expectations but below the five-year average of 95%. (Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Mark Potter and Tom Brown)