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Wheat firm on war worries; recession gloom weighs on corn, soy

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, Sept 28 (Reuters) - Chicago wheat futures edged up on Wednesday, holding on to strong gains from the previous session with support from concerns over an escalating conflict between major exporters Russia and Ukraine. Corn and soybeans eased as the risk of further supply disruption in the Black Sea zone was outweighed by growing recession worries that pushed the dollar to a new 20-year high and world share prices to two-year lows.

"There is some support from fears that Russia/Ukraine war disrupts exports from the Black Sea, and also concern with Russia's threats to use nuclear weapons," research firm Hightower Report said in a note. "This support may be short-lived."

Tensions over the seven-month-old conflict have risen as Russian-occupied parts of Ukraine held referendums on joining Russia, Moscow warned it could use nuclear weapons and the European Union pointed to sabotage as the cause of a major leak from Russian gas pipelines.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.4% at $8.75 a bushel by 0956 GMT, although it remained below two-month highs hit last week. Wheat and other grain markets have been weighing the threat of further disruption to Black Sea trade against recent Ukrainian shipments through a U.N.-supervised safe corridor and the risks of an economic downturn that would dent demand.

CBOT corn eased 0.5% to $6.64 a bushel and soybeans gave up 1.0% to $13.94-1/2 a bushel. Malaysian palm oil plunged 8% as recession jitters added to pressure from an expected upturn in production.

The U.S. Department of Agriculture (USDA) said late Monday the corn harvest was 12% complete, behind the five-year average of 14%. The soybean harvest was 8% complete, lagging the five-year average of 13%.

Grain markets are also awaiting fresh fundamental direction from Friday's USDA quarterly U.S. grain stocks report.

Prices at 0956 GMT Last Change Pct End Ytd Pct Move 2021 Move CBOT wheat 875.00 3.50 0.40 770.75 13.53 CBOT corn 664.00 -3.50 -0.52 593.25 11.93 CBOT soy 1394.50 -13.50 -0.96 1339.25 4.13 Paris wheat 348.00 -0.50 -0.14 276.75 25.75 Paris maize 336.00 -0.25 -0.07 226.00 48.67 Paris rape 593.75 -9.00 -1.49 754.00 -21.25 WTI crude oil 78.20 -0.30 -0.38 75.21 3.98 Euro/dlr 0.95 0.00 -0.47 1.1368 -16.02 Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne.

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Kirsten Donovan)

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