GRAINS-Wheat, soybean futures ease after rally; corn steady-higher

CHICAGO, Feb 13 (Reuters) - U.S. wheat and soybean futures fell on Friday, retreating from multi-month highs set a day earlier as traders booked profits and squared positions ahead of a long U.S. holiday weekend and the upcoming Lunar New Year holidays in China, analysts said.

Reminders of ample global wheat supplies and news that India would allow wheat exports added pressure. Corn futures edged higher.

As of 12:58 p.m. CST (1858 GMT), Chicago Board of Trade March wheat futures WH26 were down 3 cents at $5.49-1/2 per bushel, after peaking on Thursday at $5.53-1/2, the contract's highest since November 20.

CBOT March soybeans SH26 were down 2 cents at $11.35-1/4 a bushel while March corn CH26 was up 3/4 cent at $4.32 a bushel.

Wheat declined after a sharp two-session climb that analysts attributed to short-covering. Open interest in CBOT wheat futures fell on Wednesday and Thursday as prices rose, CBOT data showed, a sign of traders liquidating short positions. Trading volume was heavy on the two-day rally, with more than 300,000 CBOT wheat contracts traded each day.

On Friday, outlooks for large global wheat harvests in 2026 weighed on prices. IKAR, a consultancy, raised its forecast of the 2026 wheat crop in Russia, the world's biggest exporter, to 91 million metric tons, from 88 million previously.

Ratings for winter crops in France, the European Union's biggest grower, hit their best in three years, farm office FranceAgriMer data showed.

India's government allowed the export of 2.5 million metric tons of wheat as the world's second-biggest producer sought to support local growers amid protests over a trade deal between New Delhi and Washington.

Following this week's run of short-covering, "these bearish global supply fundamentals are going to come back to the forefront," said Randy Place, an analyst at Hightower Report.

Soybeans ticked lower on pre-weekend profit-taking a day after the CBOT March soybean contract SH26 reached its highest since early December. The arrival of a bumper Brazilian harvest anchored prices as well.

Soybeans rallied after U.S. President Donald Trump said last week that China had increased its target for U.S. soybean purchases, and a report in the South China Morning Post on Thursday said Trump and Chinese President Xi Jinping could extend their countries' trade truce for as long as a year.

Corn futures clung to modest gains, supported by a strong U.S. export pace and concerns about grain quality in China, Place said.

Chinese buyers have ramped up feed grain purchases in recent months, taking large volumes of Australian barley and U.S. sorghum after rain damaged the domestic corn harvest, trade sources said.