* Dry southern Plains forecast after dry winter lifts wheat
* Corn capped by ample supply, China stockpile policy shift
* Soy slips from 3-1/2 month peak ahead of key USDA report (New throughout, updates prices and market activity to close)
By Karl Plume
CHICAGO, March 28 (Reuters) - U.S. wheat futures jumped nearly 2 percent on Monday on technical buying and short covering amid concerns about adverse weather in parts of the winter wheat belt that could damage developing crops.
Corn firmed slightly as spillover support from rallying wheat offset concerns about abundant global feed grain stocks and a sharp drop in corn futures prices in China, the world’s No. 2 consumer of the grain.
Soybeans closed lower on profit taking from 3-1/2 month highs as traders adjusted positions ahead of a government report on spring planting intentions scheduled for release on Thursday.
Chicago Board of Trade May soft red winter wheat rose 8 cents, or 1.7 percent, to $4.71 a bushel. Buying accelerated as the contract rose above its 50-day moving average around $4.69 a bushel.
May hard red winter wheat gained 5-1/4 cents, or 1.1 percent, at $4.77 a bushel. Earlier, it climbed above its 100-day moving average around $4.79.
Some investors covered short positions in wheat after forecasts for cold temperatures that could damage crops in some U.S. wheat areas and continued dry conditions in the southern Plains wheat belt.
A weekly Commodity Futures Trading Commission report showed large speculators expanded their net short position in CBOT wheat to 127,479 contracts in the week ended March 22.
“The 16- to 30-day (forecast) is dry,” said Rich Feltes, vice president of research for RJ O‘Brien.
“It’s favorable for row crop planting but unfavorable for wheat development, especially when you consider we’ve come off of this unusually dry winter for that part of the country.”
CBOT May corn rose 1/2 cent to $3.70-1/2 a bushel, with gains capped by a local Chinese media report that the country will scrap its nine-year old stockpiling scheme from autumn and let the market decide domestic corn prices.
May soybeans shed 1-1/2 cents to $9.09 a bushel after hitting a high of $9.14-3/4, the contract’s loftiest since early December.
Traders were bracing for the U.S. Agriculture Department’s quarterly U.S. grain stocks and prospective planting reports scheduled for release on Thursday.
Analysts, on average, expected the USDA to report a jump in corn and soybean seedings over last year. The agency was also expected to estimate March 1 U.S. soybean stocks at their highest since 2007 and quarterly corn stocks at their highest since 1987. (Additional reporting by Julie Ingwersen Editing by W Simon and David Gregorio)