GRAINS-Wheat set for biggest weekly gain in a year on strong demand

* Wheat up more than 6 pct this week, biggest such rise in a
    * Corn, soybeans gain for 2nd day on short-covering bounce

 (Adds comment, detail)
    By Naveen Thukral
    SINGAPORE, Oct 14 (Reuters) - Chicago wheat climbed for a
second session on Friday, with the market poised for its biggest
weekly gain in almost a year as strong demand prompted investors
to cover short positions.
    Corn rose nearly 1 percent, adding to Thursday's 3.7-percent
rally, while soybeans were little changed after advancing more
than 1 percent the last session with gains capped by
expectations of record U.S. production.
    Chicago Board of Trade most-active wheat contract has
climbed 6.2 percent this week, the most since the end of October
last year. 
    Corn gained 3.7 percent, the biggest weekly climb in
more than a month and soybeans were largely unchanged for
the week.
    "There is ample supply of wheat, but the quality of milling
wheat is an issue," said Rajesh Singla, head of agriculture
research at Societe Generale.
    "We have problems with the crop in France, Australia is
facing adverse weather and the U.S. has some dryness. U.S. wheat
market has been oversold and it is trading below the cost of
    Commodity funds were net buyers of CBOT corn, wheat and
soybean futures on Thursday, traders said.  
    The funds have held a historically large net short position
in CBOT wheat as of Oct. 4, leaving the market vulnerable to
short-covering rallies. 
    On Friday, wheat rose 0.7 percent to $4.19 a bushel by 0257
GMT, corn added 0.9 percent to $3.52-1/2 a bushel and soybeans
were unmoved at $9.56-1/4 a bushel.
    Saudi Arabia and Egypt both announced plans to buy wheat.
Algeria announced a purchase tender earlier this week, and Syria
struck a deal to purchase 1 million tonnes of Russian wheat.
    Soybean prices face resistance from a record-large U.S.
crop. The U.S. Department of Agriculture on Wednesday raised its
forecast for U.S. soybean production to 4.269 billion bushels.
 Grains prices at  0257 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  419.00  3.00     +0.72%   +2.89%       402.21  68
 CBOT corn   352.50  3.00     +0.86%   +2.03%       336.98  67
 CBOT soy    956.25  0.00     +0.00%   +0.21%       959.73  51
 CBOT rice   10.21   -$0.02   -0.20%   -1.78%       $9.83   63
 WTI crude   50.56   $0.12    +0.24%   +0.76%       $46.92  64
 Euro/dlr    $1.104  -$0.016  -1.39%   -0.95%               
 USD/AUD     0.7600  0.003    +0.33%   +0.24%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral; Editing by Joseph Radford)