Wires

CORRECTED-GRAINS-U.S. wheat futures surge to 5-mth high on fund covering, global supply worries

P.J. Huffstutter

global supply worries@ (Corrects to 5-month, not 6-month, high in headline and first paragraph.)

* Wheat underpinned by declining outlook for Russia's crop

* No deliveries against CBOT December wheat or corn contracts

* Soybeans slip as U.S.-China tensions mount

CHICAGO, Nov 29 (Reuters) - Chicago wheat futures exploded to a five-month high on Friday due to threats to global production and as fund scrambled to cover their short positions in the post-holiday market, traders said.

The wheat rally gave support to Chicago corn futures, which hit a three-week high on the day, a day after the U.S. Thanksgiving Day holiday. Soybean futures fell on growing U.S.-China tensions.

Wheat futures rose on a mix of technical and emerging bullish fundamentals, including rising cash values for U.S. and Russian supplies, wet weather in Europe and Australia, and fears of a decline in U.S. acreage, traders said.

But traders said it was the funds scrambling to cover their positions that mostly fuelled the rally, amid news that there were no deliveries against the CBOT December wheat contract on first notice day on Friday.

"In these low liquidity markets, when you have a bigger fish jumping into a smaller pond, they can really make a huge splash," said Daniel Hussey, senior market strategist at Zaner Group.

Adding to that support was the U.S. Department of Agriculture weekly wheat export sales data on Friday, which showed sales were slightly above analysts expectations, said Jason Roose, analyst for U.S. Commodities.

The most active Chicago wheat futures contract ended the day up 2.9%, closing at $5.41-3/4 a bushel.

Corn futures also were bolstered by heavy snowfall forecasts in the northwest U.S. corn belt in the coming days, and farmers expected to face very slow progress in harvesting an estimated 8 million remaining acres of crop.

The most active CBOT corn contract settled the day up 2.08% at $3.81-1/4 a bushel.

Meanwhile, Chicago soybean futures slumped to an 11-week low on Friday with the market closely watching for updates on U.S.-China trade talks, and traders less than impressed with a jump in recent soybean export sales between the two countries.

Concerns over U.S.-China trade tensions resurfaced after China rebuked U.S. President Donald Trump's decision to ratify a bill backing protesters in Hong Kong. China said on Thursday it would take "firm counter measures" if the United States continues to interfere in Hong Kong.

That quelled any market buzz from the USDA's weekly export sales, which reported the biggest volume of soybean exports sold to China in three weeks.

The most active Chicago Board of Trade (CBOT) soybean contract settled down 0.62% at $8.76-3/4 a bushel. (Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by Marguerita Choy and Bill Berkrot)