GRAINS-Wheat hits 4-week high on soft dollar, crop concerns, and short-covering

CANBERRA, May 21 (Reuters) - Chicago wheat futures climbed to a four-week high on Wednesday, supported by a soft dollar, concerns over northern hemisphere production and a bout of short-covering by speculators.

Corn futures climbed to a one-week high, and soybeans rose on fears that heavy rains may have damaged crops in Argentina.

FUNDAMENTALS

* The most active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.4% at $5.48-1/4 a bushel, as of 0105 GMT, after reaching $5.48-1/2, its highest point since April 25.

* CBOT soybeans Sv1 rose 0.2% to $10.55-1/2 a bushel and corn Cv1 was trading 0.2% higher at $4.55-1/2 a bushel.

* Wheat sank to a five-year low of $5.06-1/4 on May 13, pressured by weak demand, abundant supply, and an increase in speculative bearish positions.

* Hot and dry weather is threatening crops in China, with temperatures in the wheat-producing region of Henan reaching 40 degrees Celsius (104 degrees Fahrenheit) on Tuesday.

* Traders believe that recent frosts in Russia have not caused significant crop damage, but high temperatures and the lack of rain over the coming months are likely to deplete the harvest in Rostov, Russia's largest grain region, the head of the local grain lobby group said.

* In the United States, an unexpected decline in winter wheat ratings has reduced optimism about the size of the upcoming harvest.

* Speculators' large net short position in CBOT wheat leaves the market vulnerable to short-covering. Heavy buying by funds pushed prices up by 3.2% on Tuesday.

* Argentina will extend a tax break on wheat exports, Economy Minister Luis Caputo said.

MARKETS NEWS

* The dollar weakened again on Tuesday, weighed down in part by more cautious remarks about the economy by Federal Reserve officials, even as traders looked ahead to U.S. talks with Japan that could include discussions on currencies as part of a trade deal. .DXY USD/

* Major stock indexes eased while longer-dated U.S. Treasury yields inched higher, with investors focused on U.S. fiscal concerns as Congress debated a bill for sweeping tax cuts. MKTS/GLOB