Wheat holds near 3-1/2-month high on supply concerns
Adds analyst comment, updates prices
CANBERRA, Oct 2 (Reuters) -Chicago wheat futures rose again on Wednesday and were close to 3-1/2-month highs reached in the previous session on concerns that dry weather in the Black Sea region and Australia will reduce supply.
Corn prices also gained and were near three-month highs, supported by wheat's rally and a sharp rise in oil prices after an Iranian missile attack on Israel. Higher oil prices can raise demand for biofuel made from feedstock including corn.
Soybean futures inched higher.
The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.1% at $5.99-1/2 a bushel at 0556 GMT, after touching $6.03 on Tuesday - the highest since June 16.
CBOT corn Cv1 rose 0.4% to $4.30-1/2 a bushel after hitting $4.33, its highest since June 27, on Tuesday, while soybeans Sv1 climbed 0.3% to $10.60-1/4 a bushel.
All three contracts haverecovered some ground after touching four-year lows in recent months amid plentiful supply.
"Dry conditions across the Black Sea and Russia have impacted Russian wheat planting. We've also seen additional short-covering through September," said Rod Baker at Australian Crop Forecasters in Perth.
Global supply would start to tighten, supporting prices, he added.
Russia's Voronezh, a major farming area in the world's top wheat exporting nation, declared a drought emergency on Tuesday, underscoring parched conditions.
Russian wheat export prices rose last week, even as the pace of shipments picked up.
Traders are also speculatingthat Russia couldrestrict exports in the coming months, StoneX analyst Arlan Suderman said.
Meanwhile, analysts downgraded expectations for Australia's upcoming harvest by well over a million tons due to lack of rainfall and widespread frost.
Dry weather is also affecting crops in Ukraine, whose exports fell last month, and Argentina, while too-wet conditions in Western Europe depressed EU wheat exports.
Brent crude oil LCOc1 rose 2.5% on Tuesday and another 1.7% on Wednesday as Israel and the U.S. promised to retaliate against Iran, fanning fears of a wider war.
In other crops, the U.S. ismid-way through what are expected to be huge harvests of corn and soybeans. StoneX raised its estimates for yields and production of both.
Reporting by Peter Hobson; Editing by Rashmi Aich and Sumana Nandy
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