GRAINS-Wheat up on war worries; corn, soy also firm despite recession fears
(Updates with closing U.S. prices)
By Julie Ingwersen
CHICAGO, Sept 28 (Reuters) - U.S. wheat futures rose more than 3% on Wednesday, supported by fears of escalating conflict between major grain exporters Russia and Ukraine, as well as dry conditions in the U.S. Plains crop belt, analysts said.
Corn followed wheat futures higher and soybeans closed up fractionally, shaking off pressure from declines in global vegetable oil markets.
Chicago Board of Trade December wheat settled up 31-3/4 cents, or 3.6%, at $9.03-1/4 per bushel. CBOT December corn ended up 3 cents at $6.70-1/2 a bushel and November soybeans finished up 3/4 cent to settle at $14.08-3/4 a bushel.
Wheat posted the biggest advance on the risk of further supply disruption in the Black Sea export region. Russia is poised to annex a swath of Ukraine after what Kyiv and the West denounced as illegal sham referendums held at gunpoint.
"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.
Meanwhile, dry conditions persist in the southern U.S. Plains, inhibiting the planting of the 2023 winter wheat crop, while the harvest pace has lagged in parts of Canada. In Manitoba, the fall harvest was only 47% complete, behind the five-year average of 79%, the provincial government said in a weekly report.
In South America, the Buenos Aires grains exchange projected that Argentine wheat production would fall nearly 22% from a year ago to 17.5 million tonnes due to drought.
"There are general concerns out there in the way of weather," said Terry Reilly, senior commodity analyst with Futures International in Chicago.
Still, worries about a global recession hurting demand for goods continued to hang over commodity markets, capping rallies. Malaysian palm oil futures hit a near 20-month low, anchoring CBOT soyoil and soybeans.
Bearish weekly U.S. ethanol data pressured corn futures. The U.S. Energy Information Administration said weekly production of corn-based ethanol fell last week to 855,000 barrels per day, a 19-month low, while stockpiles rose to 22.691 million barrels.
Traders await fresh fundamental direction from the U.S. Department of Agriculture's quarterly U.S. grain stocks and annual small grains reports, both due on Friday. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Kirsten Donovan, Jonathan Oatis and Richard Pullin)
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