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CBOT Wheat Hits Three-Month High As U.S. Cuts Global Crop Estimates

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Chicago Board of Trade wheat futures climbed to a three-month high on Thursday after the U.S. Department of Agriculture slashed global production estimates.

Corn futures topped a one-month high on a smaller-than-expected U.S. yield forecast in a USDA crop report that fueled concerns about tightening grain supplies in major exporters due to harsh weather.

The monthly report reduced the U.S. government's estimates for wheat harvests by about 24% in Canada and 15% in Russia due to hot, dry conditions.

Drought also hampered U.S. wheat production, which was forecast at a 19-year low, 2.8% below the government's July forecast.

The USDA "took everything out of Russian and Canada on wheat you could ask for and more," said Charlie Sernatinger, analyst for ED&F Man Capital.

Analyst firm Strategie Grains separately trimmed its European Union soft wheat production forecast by 1%.

The most-active wheat contract climbed 30-1/2 cents to $7.57-1/2 bushel by 12:40 p.m. GMT (1740 GMT) and reached its highest price since May 7. On Paris-based Euronext, wheat futures set contract highs.

CBOT corn was 22 cents higher at $5.81-1/4 a bushel and touched its highest price since July 2. Soybeans rose 4-1/2 cents to $13.44-1/2/

The USDA estimated U.S. farmers will harvest 14.750 billion bushels of corn, with an average yield of 174.6 bushels per acre, and 4.339 billion bushels of soybeans, with an average yield of 50.0 bushels.

Analysts had been expecting the USDA to peg corn production at 15.004 billion bushels, with an average yield of 177.6 bushels per acre, and soybean production at 4.375 billion bushels, with a yield of 50.4 bushels.

The corn crop estimate was down 2.7% from July and the soy crop estimate was 1.5% lower.

"For corn, we're looking at a fairly tight carry-over," said Ted Seifried, chief ag strategist for Zaner Group. "But we have to wonder which way we go from here with crop conditions improving."


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