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Wheat near three-month high as U.S. crop cut, Ukraine war in focus

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, Oct 3 (Reuters) - Chicago wheat futures rose on Monday to hold near a three-month high as a reduced official estimate of the U.S. harvest and heightened tensions in the Ukraine war kept attention on global supply risks. Corn rose also held firm, supported by a lower than expected estimate of U.S. stocks. Soybeans inched up as strength in mineral and vegetable oil markets helped counter pressure from a firm dollar and Friday's larger than expected U.S. soybean stocks tally.

The 2022 U.S. wheat harvest was smaller than previously forecast, the U.S. Department of Agriculture said on Friday, cutting its crop assessment to 1.650 billion bushels, below trade expectations. That added impetus to a wheat rally fueled by Russia's formal annexation of a swathe of Ukraine after holding what Russia called referendums in occupied areas. Western governments and Kyiv said the votes breached international law and were coercive and non-representative.

"Bullish data from the USDA and continued escalation of Black Sea war issues helped support (prices)," research firm Hightower Report said in a note. The sharp cut to the U.S. wheat crop figure and uncertainty over wartime trade with Russia and Ukraine - two of the world's largest wheat exporters - have put the focus back on relatively tight global grain inventories.

The Chicago Board of Trade (CBOT) most-active wheat contract was up 1.4% at $9.34-3/4 by 1049 GMT, not far from Friday's three-month high of $9.46. CBOT corn added 1.0% to $6.84-1/2 a bushel and soybeans were up 0.1% at $13.65-3/4 a bushel. In a separate stocks report on Friday, the USDA pegged U.S. corn inventories below trade expectations. Corn and vegetable oil markets got a boost from rising crude oil prices. Strength in vegetable oils lent some support to soybeans, which are partly processed for soyoil. The USDA's higher than expected U.S. soybean stocks estimate on Friday had added pressure to a market already curbed by competition from South American supplies.

Prices at 1049 GMT Last Change Pct End Ytd Pct Move 2021 Move CBOT wheat 934.75 13.25 1.44 770.75 21.28 CBOT corn 684.50 7.00 1.03 593.25 15.38 CBOT soy 1365.75 1.00 0.07 1339.25 1.98 Paris wheat 357.25 0.50 0.14 276.75 29.09 Paris maize 343.75 2.75 0.81 226.00 52.10 Paris rape 627.75 -5.25 -0.83 754.00 -16.74 WTI crude oil 82.69 3.20 4.03 75.21 9.95 Euro/dlr 0.98 0.00 -0.28 1.1368 -14.04 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 Sherry Jacob-Phillips, Subhranshu Sahu and David Evans)

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