GRAINS-Corn holds near 16-month high on strong US export demand

Adds analyst comment, updates prices

CANBERRA, Feb 19 (Reuters) - Chicago corn futures rose on Wednesday and were within a whisker of the previous day's 16-month high, with strong U.S. export demand, falling inventories and fund buying supporting prices.

Wheat futures also gained and were near their highest level since October 2024 amid concerns that cold weather in Russia and the U.S. could damage crops and curtail supply.

Soybeans edged lower as traders braced for a deluge of supply from Brazil's ongoing harvest.

The most active corn contract on the Chicago Board of Trade (CBOT) Cv1 was up 0.1% at $5.02-1/2 a bushel at 0618 GMT, near Tuesday's high of $5.04.

CBOT wheat Wv1 rose 0.2% to $6.19 a bushel and soybeans Sv1 eased 0.1% to $10.37-3/4 a bushel.

The U.S. Department of Agriculture (USDA) on Tuesday said 1.6 million metric tons of U.S. corn were inspected for export last week, more than expected and continuing a strong run of U.S. sales that is forecast to draw down U.S. inventories.

Funds have already built up a large net long position in CBOT corn and bought more on Tuesday, traders said.

U.S. President Donald Trump said he would impose tariffs on auto, semiconductor and pharmaceutical imports. However, agricultural trade has not yet been hit with trade barriers and some analysts think tariff negotiations could see increased purchases of U.S. crops.

Dry weather is damaging corn crops in Argentina and a behind-schedule sowing programme risks curtailing output in Brazil, said Rabobank analyst Vitor Pistoia, predicting that prices will continue to drift higher.

Many U.S. farmers are unable to make money from corn at below $5 a bushel and higher prices are needed to incentivise planting, he added.

In wheat, the head of analysis at Russian shipper Rusagrotrans said Russian exporters would be able to deliver no more than 8.1 million tons of wheat by the end of the current 2024-25 season, well below their permitted quota.

Russian wheat export prices have been rising in recent weeks on falling shipments.