Wheat up on war worries; corn, soy also firm despite recession fears



By Julie Ingwersen

CHICAGO, Sept 28 (Reuters) - U.S. wheat futures were on track to climb about 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 while soybeans firmed in choppy trade, shaking off pressure from declines in global vegetable oil markets.

As of 1:11 p.m. CST (1811 GMT), Chicago Board of Trade December wheat WZ2 was up 30 cents at $9.01-1/2 per bushel. CBOT December corn CZ2 was up 3-1/2 cents at $6.71 a bushel and November soybeans SX2 were up 1-3/4 cents at $14.09-3/4 a bushel.

Wheat posted the biggest advance on the risk of further supply disruption in the Black Sea export zone. Moscow is poised to annex a swath of Ukraine, releasing what it called vote tallies showing support in four partially occupied provinces to join Russia, 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 harvest is off to a slow start in parts of Canada. In Manitoba, the fall harvest was only 47% complete, lagging 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 17.5 million tonnes due to drought.

"There are general concerns out there in the way of weather," noted 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.

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 were awaiting fresh fundamental direction from Friday's USDA quarterly U.S. grain stocks report.
Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Kirsten Donovan and Jonathan Oatis

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