GRAINS-Wheat futures near two-week highs on US weather risks

By Tom Polansek

CHICAGO, Jan 8 (Reuters) - Chicago Board of Trade wheat futures approached a two-week high on Thursday due to concerns over dry weather in U.S. growing areas and Russian attacks on infrastructure in exporter Ukraine, analysts said.

Corn futures also edged up, while soybeans slipped as traders adjusted positions ahead of the release of highly anticipated U.S. Department of Agriculture reports on Monday.

Ahead of the crop data, traders eyed worsening drought conditions in the Plains, where farmers grow hard red winter wheat used to make bread. About 32% of Kansas, the top U.S. winter wheat producer, was suffering from abnormal dryness as of January 6, up from 28% a week earlier, according to the U.S. Drought Monitor.

WHEAT CROP CONDITIONS DECLINE

Some traders said it was too early for weather to impact yields for crops that will be harvested around June.

Last month, condition ratings for winter wheat declined in Kansas and other Plains states, USDA data showed on Tuesday.

"Despite the recent dryness, winter wheat ended December in reasonably good shape," the USDA said in a daily weather report on Thursday.

Most-active CBOT wheat Wv1 was up 4 cents at $5.22 a bushel at 11:30 a.m. CST (1730 GMT), while K.C. March wheat futures KWH26 rose 2-3/4 cents to $5.34-1/4 per bushel. Both markets reached their highest levels since December 26.

The strength in prices "was likely tied to the recent decline in U.S. winter wheat conditions," CM Navigator analyst Donatas Jankauskas said.

Intense Russian strikes on Ukraine, a major wheat and corn supplier, have also revived worries about disruption to the Black Sea grain trade.

USDA TO RELEASE CROP DATA

The USDA on Monday is slated to issue estimates on U.S. winter wheat plantings and last year's U.S. corn and soybean harvests, along with data on grain stocks as of December 1.

The average trade estimate for corn stocks, at 12.962 billion bushels, would represent the largest December 1 corn stocks figure in USDA records dating to 1926, according to a Reuters poll.

In other news, exporters sold 132,000 metric tons of U.S. soybeans to China for 2025/26 delivery, the USDA said. Traders said there was talk about larger sales.

CBOT corn Cv1 was 1 cent higher at $4.47-3/4 a bushel, and CBOT soybeans Sv1 dropped 3 cents to $10.64 a bushel.