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Wheat up on weather risks, demand ahead of USDA report

PARIS/SINGAPORE - Chicago wheat futures edged higher on Friday to halt a two-day losing streak, supported by weather risks to global supply and an upturn in demand from major wheat importers.

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PARIS/SINGAPORE - Chicago wheat futures edged higher on Friday to halt a two-day losing streak, supported by weather risks to global supply and an upturn in demand from major wheat importers.

Corn and soybeans also ticked up as Chicago futures drew strength from a weaker dollar and a broad rally in commodity and equity markets after the minutes of the Federal Reserve's last meeting showed it is in no rush to raise rates.

Price movements were restrained as the focus of grain investors remained monthly supply-demand estimates from the U.S. Department of Agriculture (USDA) due at 1600 GMT.

Chicago Board of Trade December wheat gained 0.7 percent to $5.15-1/4 a bushel by 1244 GMT.

The contract had given up about 3 percent in the previous two sessions as forecasts of rain relief in the U.S. hard red winter wheat belt eased crop worries.

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"There is no relief though in prospect for U.S. soft red winter wheat regions and dry regions around the Black Sea," Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia said in a note.

The area sown with winter grain for Ukraine's 2016 harvest could fall by up to 30 percent due to dry weather, a senior weather forecaster said on Friday, losses which would affect wheat as well as barley.

In Australia, another major wheat exporter, wheat production is expected to be almost 4 percent short of the current official outlook due to dryness linked to El Nino and above-normal temperatures, a Reuters poll showed.

A run of tenders this week by big wheat importing countries in North Africa and the Middle East was giving some demand impetus to the market, even if offers made on Friday in an Egyptian tender showed U.S. wheat was not competitive enough to be offered.

"Wheat importers are back in the market," a European trader said, noting a purchase by Algeria and a pending tender by Saudi Arabia.

The USDA is expected to trim U.S. wheat stocks in its monthly report, and also lower corn and soybean stockpiles.

Interest in the USDA report will also be centered on its updated corn and soybean production estimates that come as the U.S. harvest is in full swing. Analysts expect the agency to cut its projections for both crops.

CBOT December corn added 0.5 percent to $3.93-1/4 a bushel and November soybeans gained 0.3 percent to $8.84-1/4 a bushel.

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