CANBERRA: Chicago wheat futures fell in early trading on Wednesday, after concerns that dry weather in the Black Sea region would reduce supply pushed prices to their highest since mid-June in the previous session.

Corn prices held near three-month highs, supported by wheat's rally and a sharp rise in oil prices following an Iranian missile attack on Israel.

Soybean futures edged lower.

 

FUNDAMENTALS

* The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.4% at $5.96-1/2 a bushel at 0030 GMT, after touching $6.03 on Tuesday, its highest level since June 16.

* CBOT corn was unchanged at $4.29 a bushel, after hitting $4.33, its highest since June 27, in the previous session.

* Soybeans slipped 0.2% to $10.55-1/2 a bushel.

* All three contracts hit four-year lows in July and August due to plentiful supplies but have recovered some ground.

* Brent crude oil rose 2.5% on Tuesday and a further 1% on Wednesday as Israel and the United States promised to retaliate against Iran, fanning fears of a wider war.

* Russia's Voronezh region, a major farming area in the world's top wheat exporting nation, declared a drought emergency, underscoring parched conditions that are hampering winter wheat sowing.

* Russian wheat export prices rose last week, even as the pace of shipments picked up.

* "The primary focus (in the market) remains on speculation that Russia will be restricting exports in the last half of the marketing year," StoneX analyst Arlan Suderman wrote in a note.

* Dry weather is also affecting crops in Ukraine, whose exports fell last month, and southern hemisphere exporters Argentina and Australia, which are heading towards harvest.

* Too-wet conditions, meanwhile, depressed the recent harvest in Western Europe, with the European Commission saying on Tuesday that EU soft wheat exports so far in the 2024/25 season are down 26% from the previous season.

* In other crops, the United States is mid-way through what are expected to be huge harvests of corn and soybeans. StoneX on Tuesday raised its estimates for yields and production of both crops.

* Traders are eyeing a strike by U.S. dockworkers that began on Tuesday, halting the flow of about half the country's ocean shipping.

* Commodity funds have been reducing their short positions in CBOT wheat, corn and soybeans in recent weeks and were net buyers of all three on Tuesday, traders said.

 

MARKETS NEWS

* MSCI's global equities index fell with Treasury yields on Tuesday as investors shied away from riskier assets while oil futures rallied on concerns about supply after Iran launched missiles at Israel.

(Reporting by Peter Hobson; Editing by Rashmi Aich)