GRAINS-Chicago grain futures extend gains in aftermath of dollar slide

Jan 29 (Reuters) - Chicago corn, wheat and soybean futures rose further on Thursday to hold at around multi-week highs as a recent plunge in the dollar continued to support commodities priced in the U.S. currency.

A sharp rise in crude oil, driven by concerns about possible U.S. military strikes against Iran, also underpinned grains and oilseeds, which are partly used for biofuel. O/R

The most-active wheat contract Wv1 on the Chicago Board of Trade was up 1% at $5.41-1/2 a bushel by 1234 GMT, after reaching its highest since December 2 at $5.43.

CBOT corn Cv1 was up 0.5% at $4.32-1/4 a bushel, near a two-week peak struck on Wednesday, while CBOT soybeans Sv1 added 0.6% to $10.81-1/4 a bushel, approaching a near seven-week high hit on Wednesday.

"It's all about the U.S. dollar's drops," said Vitor Pistoia, an analyst at Rabobank. "A weaker dollar makes U.S. exports cheaper."

Grain markets will get an update on overseas demand from weekly U.S. export sales figures later on Thursday.

The dollar index =USD tumbled to a four-year low on Tuesday, with U.S. President Donald Trump's reference to its value as "great" fuelling expectations of further weakness.

While the greenback has since regained ground, supported by comments from Treasury Secretary Scott Bessent reaffirming a strong dollar policy, its recent plunge was still weighing on investor positioning, traders said.

"The dollar fell a long way, brutally and quickly, in the last few days so the CBOT market is having to adjust to that," a European trader said.

Strength in wheat was also fuelled by short-covering by investment funds and the breaching of chart resistance levels, analysts said.

However, plentiful global supply was still restraining corn, wheat and soybean prices.

In top soybean producer Brazil, grain cooperative Coamo said it expects its 2026 harvest to be the largest ever.

The prospect of a bumper Brazilian soybean harvest was tempering concern about parched conditions affecting some soy and corn crops in Argentina.

In wheat, agricultural consultancy Sovecon on Tuesday raised its 2025/26 Russian wheat export forecast, underscoring a hefty surplus in the world's biggest wheat-exporting nation.