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Soybeans extend rally, corn holds gains after USDA supply cuts

By Gus Trompiz and Enrico Dela Cruz

PARIS/MANILA, Sept 13 (Reuters) - Chicago soybean futures extended a rally to a new two-month top while corn held onto day-earlier gains as reduced U.S. government crop forecasts renewed global supply concerns. Wheat was higher as it also stayed near a two-month peak, drawing support from corn and uncertainty over Black Sea supplies following Russian criticism of a diplomatic deal allowing maritime grain exports from war-torn Ukraine.

Further weakness in the dollar, as investors awaited U.S. inflation data to see if price pressures were ebbing, also underpinned Chicago futures.

The most-traded soybean contract on the Chicago Board of Trade (CBOT) was up 1.1% at $15.05 a bushel, after earlier touching its highest since end-June. CBOT corn was up 0.1% at $6.96-3/4 a bushel, near Monday's 2-1/2 month high, while wheat added 1.5% to $8.71-1/4 a bushel.

U.S. corn and soybean supplies will fall to multi-year lows, as hot and dry weather during August in western growing areas cut harvest potential, the USDA said on Monday in its widely followed World Agricultural Supply and Demand Estimates (WASDE). The agency's reduced U.S. soybean harvest estimate caught attention as it contrasted with favorable field surveys in recent weeks.

"The latest WASDE report from the USDA came as a surprise to the soybeans market in particular," Commerzbank said in a note.

A lower forecast for the U.S. corn crop had been anticipated by traders, but together with a drought-affected crop in Europe and war-disrupted exports from Ukraine revived worries about world supply. Condition ratings for the U.S. corn and soybean crops declined in the last week while the corn harvest began in southern reaches of the Midwest, the USDA said in a separate report issued after Monday's close.

"The tight balance pattern of U.S. soybeans in the international market in 2022/23 is expected to continue, and it is difficult to completely change in a short period of time," analysts at Zhongzhou Futures in China said in a note.

Prices at 1123 GMT Last Change Pct End Ytd Pct Move 2021 Move CBOT wheat 871.25 12.50 1.46 770.75 13.04 CBOT corn 696.75 0.75 0.11 593.25 17.45 CBOT soy 1505.00 16.75 1.13 1339.25 12.38 Paris wheat 338.00 2.50 0.75 276.75 22.13 Paris maize 329.50 2.00 0.61 226.00 45.80 Paris rape 615.50 10.75 1.78 754.00 -18.37 WTI crude oil 89.20 1.42 1.62 75.21 18.60 Euro/dlr 1.02 0.01 0.61 1.1368 -10.44 Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne.(Reporting by Gus Trompiz and Enrico Dela Cruz in Manila; Editing by Rashmi Aich and Ed Osmond)

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