GRAINS-Wheat extends gains on war and weather risks

By Daphne Zhang and Gus Trompiz

BEIJING/PARIS, Dec 24 (Reuters) - Chicago wheat rose for a fifth session on Wednesday as worries about war escalation in the Black Sea export zone and severe cold in Russian wheat belts encouraged short-covering before the Christmas break, traders and analysts said.

Soybean and corn futures edged up, with grain markets also drawing support from a falling dollar and a rally in crude oil.

Gains remained moderate, with ample global supplies hanging over grain markets after multi-week price lows last week.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 ended the overnight trading session 1.0% up at $5.22 per bushel, after touching its highest in over a week.

Russian attacks on Ukrainian ports have reinforced short-covering by investors that typically occurs before the year-end holidays.

"You have a bit of weather at play as well," a European trader said of the wheat rally, citing the cold in Russia, dryness in the U.S. Plains and mid-harvest rain in Australia.

However, snow cover should initially protect winter wheat in Russia from frost damage on Wednesday, while snow is set to spread in the next two weeks in Russia and also Ukraine, Commodity Weather Group said in a note.

Bumper volumes expected from ongoing harvests in Argentina and Australia are set to bolster global supply for the rest of the 2025/26 season.

Russia, meanwhile, confirmed it will set a grain export quota of 20 million metric tons for February 15 to June 30. That is double the year-ago level and suggests Russia has ample volumes of wheat to ship after a slower than usual start to its export campaign.

CBOT soybeans Sv1 gained 0.6% to $10.70 a bushel. Corn Cv1 added 0.4% to $4.49-1/4 a bushel, just off an earlier three-week high.

In the soybean market, traders remained cautious about the pace of Chinese purchases of U.S. beans under a bilateral trade truce, while forecasters continued to project another record harvest in Brazil this season.

As well as tracking strength in wheat, the corn market remained supported by brisk U.S. exports. EXP/CORN

The dollar index =USD fell to its lowest in nearly three months on Wednesday before steadying, a trend that makes U.S. grain cheaper overseas. FRX/