GRAINS-Corn slips further as funds liquidate long positions

Adds analyst comments, updates prices

CANBERRA, Feb 26 (Reuters) - Chicago corn futures eased on Wednesday, continuing their sharp losses in recent sessions, as improving crop weather in Argentina and a revival of tariff concerns prompted speculative investors with large long positions to sell.

Wheat futures traded flat, after suffering a run of declines over the last week, as warmer weather decreased the threat of frost damage to Northern Hemisphere winter crops.

Soybeans fell, with Brazil's massive ongoing harvest pressuring prices.

The most-active corn contract on the Chicago Board of Trade (CBOT) Cv1 had dropped 0.1% to $4.94 a bushel by 0554 GMT.

Prices surged to an 18-month high of $5.13-3/4 last Friday as commodity funds responded to a tightening supply outlook by building up a huge net long position.

But that big net long makes the market vulnerable to profit-taking and funds have been significant net sellers in recent days, traders said.

Sparking the reversal have been rains in Argentina, expectations that the U.S. Department of Agriculture (USDA) will this week project a rise in U.S. corn planting and concerns that tariffs could hit U.S. farm exports after Donald Trump said levies on imports from Mexico and Canada were on track to be implemented.

Analysts at JPMorgan said average trade expectations were for U.S. corn plantings to swell by 2.9 million acres from last season to 93.5 million acres, with wheat area growing by 0.6 million acres to 46.7 million acres and soybean area falling by 2.7 million acres to 84.4 million acres.

"CBOT corn is overvalued," said Ole Houe at brokers and consultants IKON Commodities in Sydney, predicting further losses.

CBOT wheat Wv1 was unchanged at $5.87-3/4 a bushel and soybeans Sv1 fell 0.3% to $10.45-1/4 bushel.

Over the medium term, wheat has the strongest bull case of the three crops, Houe said.

"Russia will most likely have a smaller crop than last year and demand is relatively strong. There's lot's of immediate supply. But physical prices are gradually going up as the market gets tighter."